On March 1, 2020, WHITE Corporation purchased bonds with face amount of P5,000,000. The entity paid 94,585,000 plus transaction cost of #157,000. The bonds mature on February 28, 2022 and pay 6%...

1. Assuming the investment is appropriately recognized as financial assets at amortized cost: What is the carrying value of the investment on December 31, 2020?

2. Assuming the investment is appropriately recognized as financial assets at amortized cost: Determine the gain or (loss) to be recorded upon the sale of the investment.

3. Assuming the investment is appropriately recognized as financial assets at amortized cost: How much interest income is to be recognized in 2021?

Extracted text: On March 1, 2020, WHITE Corporation purchased bonds with face amount of P5,000,000. The entity paid 94,585,000 plus transaction cost of #157,000. The bonds mature on February 28, 2022 and pay 6% interest annually on February 28 of each year with 8% effective yield. The bonds are quoted at 105 on December 31, 2020. The bonds are sold at 108 on June 30, 2021.