Solution-What amount of unrealized loss should be reported

What amount of unrealized loss should be reported

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Reference no: EM133148267

Question - Aswath Corp. holds debt securities within a business model whose objective is achieved both by collecting contractual cash flows and selling the debt securities. The contractual cash flows are solely payments of principal and interest on specified dates.

The following amortization schedule relates to its 5-year, P1 million 7% bonds purchased on December 31, 2018, for P1,086,565. The bonds were purchased to yield 5% interest.

Date	Interest Received	Interest Income	Premium Amortization	Amortized Cost
12.31.18				1,086,565
12.31.19	70,000	54,328	15,672	1,070,893
12.31.20	70,000	53,545	16,455	1,054,438
12.31.21	70,000	52,722	17,278	1,037,160
12.31.22	70,000	51,858	18,142	1,019,018
12.31.23	70,000	*50,982	19,018	1,000,000

*Adjusted due to rounding

The fair values of the bonds at each year-end were as follows:

Date	Fair Value
12.31.19	P1,065,000
12.31.20	1,075,000
12.31.21	1,056,500
12.31.22	1,030,000
12.31.23	1,000,000

Required - What amount of unrealized loss should be reported in other comprehensive income in the 2020 statement of comprehensive income?

Reference no: EM133148267

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What amount of unrealized loss should be reported

Reference no: EM133148267

Reference no: EM133148267

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