Solution-Prepare the necessary journal entries from

Prepare the necessary journal entries from transaction date

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Reference no: EM132958782

Problem - Vast Company acquired P6,000,000, 12% bonds on February 1, 2020 for P5,486,000 to be held as financial assets at amortized cost. The bonds pay interest annually on February 1 and mature on February 1, 2024. The bonds are acquired to yield a 15% effective rate. The fiscal period for the entity is the calendar period. Amortization is done following the effective interest method. On May 1, 2022, Vast Company sold half of the bonds at 105 plus accrued interest.

Required -

1. Prepare an amortization table.

2. Prepare the necessary journal entries from transaction date up to the maturity date.

3. Compute and provide the following:

i. Carrying value of the bond investment as of December 31, 2020.

ii. Carrying value of the bond investment as of December 31, 2021.

iii. Carrying value of the bond investment sold as of May 1, 2022.

iv. Carrying value of the remaining bond investment as of December 31, 2022.

v. Gain or loss on sale of selling the bond investment on May 1, 2022.

Reference no: EM132958782

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Prepare the necessary journal entries from transaction date

Reference no: EM132958782

Reference no: EM132958782

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