What is the interest income reported by sprakenheit

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Reference no: EM132816385

CARRYING VALUE OF BONDS

On July 1, 2020, Sprakenheit Company purchased P500,000 face value Swazzeg Company 8% bonds for P455,000 plus accrued interest to yield 10%. The bonds were designated as at fair value through profit or loss. The bonds mature on January 1, 2024 and pay interest annually on January 1. On December 31, 2020, the bonds had a fair value P472,500. On February 14, 2021, Sprakenheit sold the bonds for P460,000 plus accrued interest.

Problem 1: what is the interest income reported by Sprakenheit for the year 2020?

A. P 18,200

B. P 20,000

C. P 22,750

D. P 25,000

Reference no: EM132816385

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