What is unrealized gain to be recognized in christy company

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On July 1, 2016, Christy Company purchased term bonds of Dela Pena Company for a total amount P3,050,000 which included direct transaction costs of P100,000 and appropriate accrued interest. The face value of the bonds was P3,000,000 and the coupon rate is 10%. The bonds will mature on December 31, 2020 and pay interest annually on December 31. Because of market opportunities, Dela Pena bonds were classified as debt investments at fair value through or loss by Christy Company. The bonds are quoted at 105 on December 31, 2016.

Problem 1: What is the unrealized gain to be recognized in Christy Company's profit or loss for the year 2016?

Reference no: EM132700211

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