What is the carrying amount of bond investment on december

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Reference no: EM133010785

On January 1, 2018, Dre Company purchased 5-year bonds with face amount of P8,000,000 and stated interest of 10% per year payable semi-annually on June 30 and December 31.

The bonds were acquired to yield 8%. (PV 4 decimal places)

Market Value of the bond on December 31, 2018 is 8,120,000.

Problem 1: What is the market price or purchase price of the bonds?

a. 7,351,200

b. 8,617,600

c. 7,999,880

d. 8,649,160

Problem 2: What is the carrying amount of the bond investment on December 31, 2018 supposing the business model is to collect contractual cash flow until year end?

a. 8,541,093

b. 8,594,752

c. 8,120,000

d. 8,538,542

Reference no: EM133010785

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