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What is the gain or loss from change in fair value of bond

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On January 1, 2016, Ezekiel Company received P1,077,200 for P1,000,000 face amount 12% bonds. The bonds were sold to yield 10%. Interest is payable semiannually every January 1 and July 1. The entity has elected the fair value option for measuring the financial liability. On December 31, 2016, the fair value of the bonds is determined to be P1,064,600 due to market and interest factors.

Problem 1: What is the gain or loss from change in fair value of the bonds for 2016?

a. 64,600 gain
b. 64,600 loss
c. 12,600 gain
d. 12,600 loss

Reference no: EM132881041

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