On July 1, 2020, Hero Company purchased P1,000,000 8% bonds for P866,000. Acquisition cost amounted...
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Accounting
On July 1, 2020, Hero Company purchased P1,000,000 8% bonds for P866,000. Acquisition cost amounted to P40,000. The bonds were purchased to yield 10% interest.
The bonds mature on January 1, 2026, and pay interest annually on January 1. Hero uses the effective interest method of amortization.
On December 31, 2020, what carrying amount should be reported as investment in bonds?
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