Kindly show your solution clearly. Answer items 1-3. Fact pattern for the...
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Kindly show your solution clearly. Answer items 1-3.
Fact pattern for the next six questions: On Jan. 1, 20x1, Golf Co. acquired P1,000,000 face amount, 10% bonds for P951,963. The principal is due on Jan. 1,20x4 but interest is due annually. The effective interest rate is 12%. In 20x2, Golf Co. changed its business model for managing financial assets. Golf Co. only reports annually, every Dec. 31. The quoted prices are 103 on Dec. 31, 20x2 and 104 on Jan. 1, 20x3. 6. 7. 1. The bonds are reclassified from amortized cost to FVPL. How much is the gain (loss) on reclassification and where is that amount presented? a. 57,857 in P/L c. 15,714 in P/L b. (43,292) in OCI d. 57,857 in OCI 2. The bonds are reclassified from FVPL to amortized cost. What is the amount of premium or discount to be amortized over the remaining life of the bonds subsequent to the reclassification date? a. 40,000 premium b. 40,000 discount c. 57,857 premium d. 57,857 discount 3. The bonds are reclassified from amortized cost to FVOCI. How much is the gain (loss) on reclassification and where is that amount presented? a. 57,857 in P/L c. 57,857 in OCI b. (43,292) in OCI d.o
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