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What the initial amount of the newly reclassified investment

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Reference no: EM132980851

Question - On January 1, 20X1, ABC acquired 5,000 of XYZ's bonds denominated at P1,000, 12% interest rate, 5 years, intending to collect contractual cash flows and sell them. The effective rate in the market at that time is 10%. On December 31, 20X1, the market value of the bonds is P5,200,000. ABC changes its business model in managing this financial asset by collecting contractual cash flows representing principal and interest. On the reclassification date, what the initial amount of the newly reclassified investment?

Reference no: EM132980851

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