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What is the carrying amount of the bond investment

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Question 1 - On July 31, 2019, Algeria Corp purchased 12%, P2,000,000 face amount bonds for P2,150,000 including accrued interest. Interest is payable semiannually May 1 and November 1. Bonds are dated May 1, 2019 and mature May 1, 2023. The bonds are measured at amortized cost, and straight line method of amortization is used. On January 31, 2021, the bonds were sold at 108 plus accrued interest.

1. What is the carrying amount of the investment in bonds on 12/31/2019?

2. What is the interest income in 2019?

3. What is the total cash received on January 31, 2021?

4. What is the gain on sale of bond investment on January 31, 2021?

Question 2 - On July 1, 2020, Israel Company purchased P1,000,000 of 8% bonds for P946,000, including accrued interest of P40,000. The bonds were purchased to yield 10% interest. The bonds mature on January 1, 2026 and pay interest annually on January 1. The bonds are measured at amortized cost. On December 31, 2020, what is the carrying amount of the bond investment?

Reference no: EM132813238

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