On January 1, 2022, when the prevailing market rate on similar instruments was at 7%, DEF Corporation acquired P3,000,00

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On January 1 2022 When The Prevailing Market Rate On Similar Instruments Was At 7 Def Corporation Acquired P3 000 00 1 (41.16 KiB) Viewed 11 times

On January 1, 2022, when the prevailing market rate on similar instruments was at 7%, DEF Corporation acquired P3,000,000, 10-year bonds of RST Company. Transaction costs of P243,114.27 were incurred in the purchase, resulting to a new effective interest rate of 6%. The bonds will be accounted as a financial asset at fair value through other comprehensive income and will pay interest of 9% every June 30 and December 31. The fair value of the bonds at year- end are presented below: 103 December 31, 2022 December 31, 2023 December 31, 2024 December 31, 2025 99 101 102 December 31, 2026 104 Bonds with face value of P1,000,000 were sold at 101 on June 30, 2024 after interest was collected. The investment in bonds will be initially recorded at what amount? What is the total interest income to be recognized on the investment in bonds in 2023? After updating the related investment's fair value, what is the balance of Unrealized Gain or Loss-OCI to be "recycled" to the income statement in 2024? (Indicate if debit or credit) What is the balance of the Unrealized Gain or Loss-OCI account of the investment on December 31, 2025? (Indicate if debit or credit) What is the carrying value of the investment in bonds on December 31, 2026?