Record the necessary entries

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Q1. On November 1, 2012, Howell Company purchased 9,000 of the P1,000 face value, 9% bonds of Ramsey, Incorporated, for P9,480,000, which includes accrued interest of P13,500. The bonds, which mature on January 1, 2017, pay interest semiannually on March 1 and September 1. Howell uses the straight-line method of amortization.

Howell sold half of the bonds at face amount on June 1, 2015 and the remaining @105 in March 30, 2016.

Requirement - Record the necessary entry/entries on the derecognition/reclassification of the investment in bonds.

Q2. On November 1, 2012, Horton Co. purchased Lopez, Inc., 5-year, 9%, bonds with a face value of P5,000,000. The bonds mature on July 1, 2016. The bonds are valued at 12% on issuance date.

Horton co. sold all the bonds @101 on November 1, 2015.

Requirement - Record the necessary entry/entries on the derecognition/reclassification of the investment in bonds.

Reference no: EM132980387

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