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What is the gain on the sale of the debt investment

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1. Briza Company purchased P8,000,000, 11%, 5-year bonds on April 1, 2016, when the market interest was 10%. The financial instruments meet the business model test and are classified as debt investments at amortized cost. The bonds are purchased at P8,295,000 and pay interest annually on March 31. Briza company uses effective interest method of amortization and its accounting year ends on December 31. How much is the interest revenue reported in Briza Company's statement of comprehensive income for the year ended December 31, 2017?

2. On June 1, 2016, Rain Company purchased debt investments at amortized cost, 8,000 of 1,000 face value, 8% bonds of Cath Company for P7,383,000. The bonds were purchased to yield 10% interest. Interest is payable semi-annually on December 1 and June 1. The bonds mature on June 1, 2021. Rain uses the effective interest method of amortization. On June 1, 2017, Rain sold the bonds for P7,850,000. This amount includes the appropriate accrued interest. What is the gain on the sale of the debt investment?

Reference no: EM132725022

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