On May 1, 2020, GAL Co. purchased a short-term P2,000,000 face value,
9% debt instruments for P1,860,000 including the accrued interest and
classified it as a trading security. The debt instruments mature on January
1, 2023, and pay interest semi-annually on January 1 and July 1. On
December 31, 2020, the fair market value of the instruments is 98%. On
March 2, 2021, GAL Co. sold the trading security for P1,980,000. How
much will be recognized as income on the 2020 income statement?
A. P100,000
B. P120,000
C. P160,000
D. P280,000
E. answer not given
On May 1, 2020, GAL Co. purchased a short-term P2,000,000 face value, 9% debt instruments for P1,860,000 including the accrued interest and classified it as a trading security. The debt instruments mature on January 1, 2023, and pay interest semi-annually on January 1 and July 1. On December 31, 2020, the fair market value of the instruments is 98%. On March 2, 2021, GAL Co. sold the trading security for P1,980,000. How much will be recognized as income on the 2020 income statement?
P100,000
P120,000
P160,000
P280,000
answer not given
On May 1, 2020, GAL Co. purchased a short-term P2,000,000 face value, 9% debt instruments for P1,860,000 including the accrued interest and classified it as a trading security. The debt instruments mature on January 1, 2023, and pay interest semi-annually on January 1 and July 1. On December 31, 2020, the fair market value of the instruments is 98%. On March 2, 2021, GAL Co. sold the trading security for P1,980,000. How much will be recognized as income on the 2020 income statement? *
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