Solution-What amount of cumulative unrealized loss should

What amount of cumulative unrealized loss should be reported

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Problem 1: On January 1, 2016, ABC Company purchased bonds with face amount of P4,000,000. The business model of the entity in managing the financial asset is not only to collect contractual cash flows that are solely payment of principal and interest but also to sell the bonds in the open market. The entity paid P4206,000 for the bond investment. The bonds mature on December 31, 2018 and pay 10% interest annually on December 31 each year with 8% effective yield. The bonds are quoted at 95 on December 31, 2016 and 90 on December 31, 2017. What amount of cumulative unrealized loss should be reported in the statement of changes in equity on December 31, 2017?

Option A. P0

Option B. P 473,878

Option C. P 406,000

Option D. Answer not given

Option E. P 606,000

Reference no: EM132612791

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What amount of cumulative unrealized loss should be reported

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Reference no: EM132612791

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