How much should be recognized as component of equity

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Problem

On June 30, 2009, Aileen Corp. purchased a two-year bond, which it classified as fair value through other comprehensive income. The bond had a stated principal amount of P10,000,000, which Aileen Corp. will receive on June 30, 2011. The stated coupon interest rate was 10% per year, which is paid semiannually on December 31 and June 30. The bond was purchased at a quoted annual yield of 8% on a bond-equivalent yield basis. On December 31, 2009, the bonds are quoted at 101. Get the instant assignment help. How much should be recognized as component of equity as of December 31, 2009 related to this bond investment?

Reference no: EM134027683

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