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What amount should tuguegarao report as investment in bonds

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Reference no: EM132702909

Purchase of Debt Investment and Subsequent Measurement

On July 1, 2020, Tuguegarao Company purchased as a long term investment P8,000,000 of Candon Company's 8% bonds for P7,570,000. The bonds were purchased to yield 10% interest. The bonds pay interest annually on December 31. Tuguegarao uses the interest method.

Question 1: In its December 31, 2020 balance sheet, what amount should Tuguegarao report as investment in bonds using Amortized Cost? In its December 31, 2020 balance sheet, what amount of interest income is recognized?

Reference no: EM132702909

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