On April 1, 2020, Purefoods Company purchased a P1,000,000 face value 8% bond for P910,000 including accrued interest and commission. The commission to acquire the bonds was P5,000. The bonds are dated January 1, 2020 and mature on January 1, 2025, and pay interest semi-annually on January 1 and July 1. On December 31, 2020, the bonds had a fair value of P920,000. On April 1, 2021, Purefoods sold the bonds for a total consideration of P950,000.
On April 1, 2020, Purefoods Company purchased a P1,000,000 face value 8% bond for P910,000 including accrued interest and commission. The commission to acquire the bonds was P5,000. The bonds are dated January 1, 2020 and mature on January 1, 2025, and pay interest semi-annually on January 1 and July 1. On December 31, 2020, the bonds had a fair value of P920,000. On April 1, 2021, Purefoods sold the bonds for a total consideration of P950,000.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 1RE
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Question
On April 1, 2020, Purefoods Company purchased a P1,000,000 face value 8% bond for P910,000 including accrued interest and commission. The commission to acquire the bonds was P5,000. The bonds are dated January 1, 2020 and mature on January 1, 2025, and pay interest semi-annually on January 1 and July 1. On December 31, 2020, the bonds had a fair value of P920,000. On April 1, 2021, Purefoods sold the bonds for a total consideration of P950,000.
How much is the gain from the sale of investment in debt securities on April 1, 2021?
Group of answer choices
P30,000
P10,00
P65,000
P45,000
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