What is the purchase price of the investment

Reference no: EM132727092

Problem - Accounting for Debt Investments

On January 1, 2019, Shine Company purchased a 6-year bond with a face amount of P6,000,000 to yield 15%. Interest and principal is to be paid every December 31. An active market is available so there is no problem to ascertain the fair value of the bonds. The stated rate of the bond is 13%. The bond is trading:

December 31, 2019 96

December 31, 2020 101

December 31, 2021 98.5

December 31, 2022 99.75

Use four decimal places only.

Required -

a. What is the purchase price of the investment?

b. What is the Carrying Amount of the investment?

c. What is the Interest Income of the investment?

d. What is the Gain or Loss?

Reference no: EM132727092

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