What amount of derivative asset to be reported separately

Assignment Help Financial Accounting

Reference no: EM132769278

On Nov 3, 2020, Parker Company invests a P2,000,000 in a convertible debt instrument issued by SC Company that pays fixed interest of 7% and that can be converted into 10,000 shares in SC Company in five years at Parker's option. Otherwise the debt will pay P2,000,000 at maturity. At the time of acquisition, the conversion option has a fair value of P260,000. On December 31, 2020, the debt instrument has a fair value of P1,750,000 and the conversion option has a determinable fair value of P300,000.

Problem 1: What amount of derivative asset to be reported separately in the statement of financial position assuming the company has a business model with the objective of trading financial assets?

a. None

b. P250,000

c. P260,00

d. P300,000

Reference no: EM132769278

Questions Cloud

Did the company declare any dividends in most recent year : Did the company declare any dividends in the most recent year? What type of dividends? What was the dollar value of the dividends declared?

How would you react to the kind of situational question : How would you react to this kind of situational question? You're first assignment wan in a small town where the crime rate are getting high? What would be the.

Find what amount of forward loss should parker company : Find what amount of forward loss should Parker Company recognize at December 31, 2021 statement of comprehensive income?

Find what carrying value of available for sale investment : Parker Company has a business model with the objective. What is the carrying value of the available for sale investment on October 1, 2020?

What amount of derivative asset to be reported separately : What amount of derivative asset to be reported separately in the statement of financial position assuming the company has a business model

Find how much should the national credit union invest : The National Credit Union has $250,000 available, How much should the National Credit Union invest in each security so as to maximize its return on investment?

How much power is being dissipated the diagonal resistor : How much power is being dissipated the diagonal resistor R3 and What is the power being provided by the 5V battery? Are either of the batteries being "charged"

What is human resource development : What is Human Resource Development (HRD)? Explain the phases in the systems approach to HRD. Use examples where appropriate. The response must be typed.

Create deferred tax assets or deferred tax liabilities : Indicate whether they will create deferred tax assets or deferred tax liabilities. Listed below are items which are treated differently for accounting purposes

User Account

All Pages