What amount should sprakenheit company report as debt

Reference no: EM132816382

CARRYING VALUE OF BONDS

On July 1, 2020, Sprakenheit Company purchased P500,000 face value Swazzeg Company 8% bonds for P455,000 plus accrued interest to yield 10%. The bonds were designated as at fair value through profit or loss. The bonds mature on January 1, 2024 and pay interest annually on January 1. On December 31, 2020, the bonds had a fair value P472,500. On February 14, 2021, Sprakenheit sold the bonds for P460,000 plus accrued interest.

Problem 1: On its December 31, 2020 statement of financial position, what amount should Sprakenheit Company report as debt investments?

A. P455,000

B. P457,750

C. P460,000

D. P472,500

Reference no: EM132816382

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