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On January 1, 20X1, ABC Co. acquired 14%, P2,000,000 bonds for P1,996,073. The bonds
mature on December 31, 20X3 and pays annual interest every December 31. ABC Co. incurred
transaction costs of P100,000 on the acquisition. The bonds are held under a “hold to collect
and sell” business model. The effective interest rate adjusted for the effect of the transaction
costs is 12%.
P10-3#7
What if the bonds were sold for P2,4M on September 30, 20X2.