What is the gain or loss on the sale of the bond investment

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Reference no: EM132816377

GAIN OR LOSS ON SALE OF BOND INVESTMENT

On June 1, Year 1, Fantastic Company purchased as held for collection securities 8,000 of the P1,000 face value, 8% bonds of the Universe Company for P7,383,000. The bonds were purchased to yield 10% interest. Interest is payable semiannually on December 1 and June 1. The bonds mature on June 1, Year 5.

On June 1, Year 2, Fantastic sold the bonds for P7,850,000. This amount includes the appropriate accrued interest.

Problem 1: What is the gain or loss on the sale of the bond investment?

A. P368,700

B. P366,240

C. P 48,700

D. P 46,242

Reference no: EM132816377

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