What is the adjusted balance of the investment

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Question - On September 30, 2012 CHAMP CORP. acquired a 5 year, 10%, P5,000,000 face value bonds, dated January 1, 2012. The bonds which pay interest every December 31 had a 12% prevailing interest rate in the date of the acquisition. The company paid broker's fees and non-refundable taxes amounting to P150,000. The company recorded the transaction as a debit to Investment at Fair Value Through Profit or Loss and credit to cash for the total cash payment made. The company's business model has an objective of holding debt securities to generate short-term profits. The prevailing interest in December 31, 2012 is at 9%. What is the adjusted balance of the investment as of December 31, 2012?

a. 5,161,986

b. 5,164,522

c. 4,696,264

d. 4,680,839

Reference no: EM132925272

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