ABRANILLA, JOANNA MAE
ASSIGNMENT
INVESTMENT AT AMORTIZED COST
CASE NO. 1 Principal 5,000,000 x
Interest 200,000 x
Present Value
PV of 1 at 5% for 10 Periods
PVOA of 1 at 5% for 10 Periods
Interest Received Interest Earned
7/1/2026
12/31/2026 200,000 230,692
CASE NO. 2 Interest Received Interest Earned
1/1/2026
6/1/2026 360,000 390,000
12/1/2026 360,000 391,500
3/1/2027 120,000 131,025
Carrying Amount 7,872,525
MULTIPLY BY: 0.5
TOTAL 3,936,262.50
Less: Investment Sold 3,800,000
Gain (Loss)on Sale of Investment (136,262.50)
*therefore, the answer is 0, no investment gain but rather investment loss
CASE NO. 3
Principal 4,000,000 x
Interest 360,000 x
Present Value
PV of 1 at 10% for 10 Periods
PVOA of 1 at 10% for 10 Periods
Interest Received Interest Earned
1/1/2026
12/1/2026 360,000 375,406
12/1/2027 360,000 376,946
12/1/2028 360,000 378,641
12/1/2029 360,000 380,505
12/1/2030 360,000 382,555
12/1/2031 360,000 384,811
12/1/2032 360,000 387,292
12/1/2033 360,000 390,021
12/1/2034 360,000 393,023
12/12035 360,000 396,744
CASE NO. 4
Given:
Face Amount of Bonds 5,000,000.00
Date of Issue 1-Jan-26
Nominal Rate 12%
Effective Rate 10%
Annual Interest 31-Dec
Annual installment 1,250,000.00
PV of 1 at 10% for 4 periods 0.683
PV of 1 at 10% for 3 periods 0.7513
PV of 1 at 10% for 2 periods 0.8264
PV of 1 at 10% for 1 periods 0.9091
Market Price of Bonds
Date Annual Payment Principal (basis for i
12/31/2026 1,250,000.00 5,000,000.00
12/31/2027 1,250,000.00 3,750,000.00
12/31/2028 1,250,000.00 2,500,000.00
12/31/2029 1,250,000.00 1,250,000.00
CASE NO. 5
Face amount of bonds
Acquisition cost on March 1, 2026
Discount on bonds
Annual installment on February 1, 2027 and every February 1 thereafter
Date of bonds
Interest payable semiannually on February 1 and August 31
Bond Year Bond Outstanding Discount fraction
2026 3,000,000 1/2
2027 1/2
2,000,000 1/3
2028 1/3
1,000,000 1/6
2029 __________ 1/6
6,000,000
Journal Entries
2026
Mar-01 Investment in bonds
Interest Income
Cash
Aug-01 Cash
Interest Income
Dec-31 Investment in Bonds
Interest Income
Accrued Interest Receivable
Interest Income
2027
Jan-31 Interest Income
Accrued Interest Receivable
Feb-01 Cash
Investment in Bonds
Interest Income
Aug-01 Cash
Interest Income
Dec-31 Accrued Interest Receivable
Interest Income
Investment in Bonds
Interest Income
Interest Income
2027
Jan 1- Feb 1 13,636.36
Feb 1 - Dec. 31 91,666.67
105,303.03
CASE NO. 6 Face amount
Nominal rate
Effective rate
Date of issue
Annual interest
Annual installment
PV of 1 at 14% for 4 periods
PV of 1 at 14% for 3 periods
PV of 1 at 14% for 2 periods
PV of 1 at 14% for 1 period
Date Principal payment Interest payment
12/31/2026 1,000,000 480,000
12/31/2027 1,000,000 360,000
12/31/2028 1,000,000 240,000
12/31/2029 1,000,000 120,000
4,000,000 1,200,000
Interest Interest
Year Collection Income
1/1/2026
12/31/2026 480,000 538,290
12/31/2027 360,000 406,451
12/31/2028 240,000 272,954
12/31/2029 120,000 137,567
2026
Jan-01 Investments in bond - FAAC
Cash
Dec-31 Cash
Investment in bonds - FAAC
Interest income
Cash
Investment in bonds - FAAC
2027
Dec-31 Cash
Investment in bonds - FAAC
Interest income
Cash
Investment in bonds - FAAC
0.6139 = 3,069,500
7.7217 = 1,544,340
4,613,840
0.6139
7.7217
Discount Amortization Carrying Amount
4,613,840
30,692 4,644,532
Discount Amortization Carrying Amount
7,800,000
30,000 7,830,000
31,500 7,861,500
11,025 7,872,525
tment loss
0.3855 = 1,542,000
6.1446 = 2,212,056
3,754,056
0.3855
6.1446
Discount Amortization Carrying Amount
3,754,056
15,406 3,769,462
16,946 3,786,408
18,641 3,805,049
20,505 3,825,553
22,555 3,848,109
24,811 3,872,920
27,292 3,900,212
30,021 3,930,233
33,023 3,963,256
36,744 4,000,000
rice of Bonds
Interest Payment Annual Cash Flows PV of 1 PV of cash flows
600,000.00 1,850,000.00 0.9091 1,681,835.00
450,000.00 1,700,000.00 0.8264 1,404,880.00
300,000.00 1,550,000.00 0.7513 1,164,515.00
150,000.00 1,400,000.00 0.683 956,200.00
5,207,430.00
3,000,000
2,700,000
300,000
1,000,000
2/1/2026
12%
Amortization Discount Discount Amortization
Amortization Per Year
150,000 Mar1-Dec 31 10 136,363.64 136,363.64
Jan1-Feb1 1 13,636.36
100,000 Feb 1-Dec 31 11 91,666.67 105,303.03
Jan1-Feb1 1 8,333.33
50,000 Feb 1-Dec 31 11 45,833.33 54,166.67
_________ Jan1-Feb1 1 4,166.67 4,166.67
300,000 300,000.00 300,000.00
2,700,000
30,000
2,730,000
180,000
180,000
136,364
136,364
150,000
150,000
150,000
150,000
1,180,000
1,000,000
180,000
120,000
120,000
100,000
100,000
105,303
105,303
4,000,000
12%
14%
1/1/2026
31-Dec
1,000,000
0.5921
0.675
0.7695
0.8772
Total payment PV of Cash Flows
1,480,000 1,298,256
1,360,000 1,046,520
1,240,000 837,000
1,120,000 663,152
5,200,000 3,844,928
Principal Present
Amortization Collection Value
3,844,928
58,290 1,000,000 2,903,218
46,451 1,000,000 1,949,668
32,954 1,000,000 982,622
17,567 1,000,000 -
3,844,928
3,844,928
480,000
58,290
538,290
1,000,000
1,000,000
360,000
46,451
406,451
1,000,000
1,000,000
