What amount of cumulative unrealized gain or loss should be

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On January 1, 2022, Red Lions Company purchased bonds with face amount of P4,000,000 for P4,206,000. The business model in managing the financial asset is to collect contractual cash flows that are solely payments of principal and interest and also to sell the bonds in the open market. The bonds mature on December 31, 2024 and pay 10% interest annually on December 31 each year with 8% effective yield. The bonds are quoted at 95 on December 31, 2022 and 90 on December 31, 2023. Round your answer to whole number.

Problem 1. What amount of unrealized gain or loss should be reported as component of other comprehensive income in 2022? Indicate if GAIN or LOSS.

Problem 2. What amount on unrealized gain or loss should be reported as component of other comprehensive income in 2023? Indicate if GAIN or LOSS.

Problem 3. What amount of cumulative unrealized gain or loss should be reported in the statement of changes in equity for 2023? Indicate if GAIN or LOSS.

Problem 4. What is the carrying amount of the bond investment on December 31, 2023?

Reference no: EM132853404

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