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What is the carrying amount of the bonds payable

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Question - On January 1, 2022, Ezekiel Company received the fair value of P1, 077, 200 for 12% bonds with face amount of P1, 000, 000. The bonds were sold to yield 10% interest is payable semi-annually every January 1 and July 1.

The entity has elected the fair value option for measuring the financial liability.

On December 31, 2022 the fair value of the bonds is determined to be P1, 064, 600 due to market and interest factors.

Required -

1. What is the carrying amount of the bonds payable on January 1, 2022?

2. What amount should be reported as interest expense for 2022?

3. What amount should be reported as gain or loss from change in fair value of the bonds for 2022?

4. What is carrying amount of the bonds payable on December 31, 2021?

Reference no: EM133152574

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