What is the realized gain on sale of usle bonds

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Reference no: EM133001600

The BTS Company has the following information about its debt investment which was purchased at the beginning of 2020: The USLE bonds were acquired when the prevailing market rate of interest was at 11%. Interests are collectible every December 31. Half of the USLE bonds were sold on June 30, 2021 at P1,100,000.

Additional information on the securities are as follows:

Security.                                       FV December 31, 2020                    FV December 31, 2021
10%, 2M USLE bonds, 3 years.        9% yield; P2,035,182                       12% yield; P?

Problem 1:
Assuming that the company's business model has no objective of holding the debt securities to collect contractual cash flows, what is the realized gain on sale of USLE bonds?

Problem 2: Assuming that the company's business model has an objective of holding the debt securities to collect contractual cash flows, what is the realized gain on sale of USLE bonds?

Reference no: EM133001600

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