Problem 2
The following transaction transpired for Bokod Company during the year.
- On January 1, 2024, Bokod acquired from Buguias a 4-year bond with a face value of P1,200,000 and stated interest of 10\% per year payable annually on December 31. The bonds were acquired to yield \( 12 \% \).
- On January 1, 2024, Bokod acquired from Baguio a 10\% interest, 4-year bonds with a face value of \( \mathrm{P} 1,200,000 \) for \( \mathrm{P} 1,100,000 \). Transaction cost paid by the company amounted to P44,752. Interest is payable annually on December 31.
- On January 1, 2024, Bokod Co. acquired from Kabayan a 4-year bonds with a face value of P1,800,000 and stated interest of 10\% per year. The bonds mature in 4 equal annual installments every December 31. The interest is also payable every December 31. The bonds were acquired to yield \( 12 \% \).
- On April 1, 2024, Bokod acquired from Kayapa a 4-year bonds with a face value of P2,000,000 and stated interest of \( 10 \% \) per year payable annually on December 31. The bonds were acquired to yield \( 12 \% \).
All the investments are to be appropriately classified as FAAC.
Questions:
Based on the above data, answer the following: (Round off present value factors to four decimal places)
1. How much is the purchase price of bonds acquired from Buguias?
2. How much is the purchase price of bonds acquired from Kayapa?
3. How much is the purchase price of bonds acquired from Kabayan?
4. What is the effective rate of the bonds acquired from Baguio?
5. How much is the total interest income in 2024 for the above investments?
