Reference no: EM132708781

Problem - On January 1, Year 1, Glow Company purchased P1,000,000 12% bonds of Glow Company for P1,063,394, a price that yields 10%. Interest on these bonds is payable every December 31. The bonds mature on December 31, Year 4. The bonds were designated as at fair value through profit or loss. Market value of the bonds on different dates is as follows:

December 31, Year 1 108

December 31, Year 2 106

December 31, Year 3 104

On April 1, Year 3, to pay a maturing obligation, Glow sold P600,000 face value bonds at 101 plus accrued interest. What amount of gain or loss should Glow report on the sale of the bond investments on April 1, Year 3?

A. 30,000 gain

B. 30,000 loss

C. 15,000 gain

D. 15,000 loss