ABC Company

Face value
Term
Coupon rate
Coupon
Market yield
Effective yield
Interest is payable annually every January 1
Market yield
Effective yield
Brokerage and commissions fee
December 31, 2009

December 31, 2010
December 31, 2011
December 31, 2012
December 31, 2013
December 31, 2014
December 31, 2015
December 31, 2016
December 31, 2017
1,000,000
10
6%
60000
5.50%
5%
Date
1/1/2009
1,037,688.13
1,077,217.35
39,529.22
Market Yields
6%
7%
5%
4.50%
5.50%
6.50%
5%
4%
3%
The investment was sold on December 31, 2014
12/31/2009
Term Remaining
9
8
7
6
5
4
3
2
1
1/1/2010
12/31/2010
1/1/2011
12/31/2011
1/1/2012
12/31/2012
1/1/2013
12/31/2013
1/1/2014
12/31/2014
Investment in debt securities

Cash
Brokerage and commissions fee
Cash
Interest receivable
Interest income
Unrealized loss on FVTPL
Dr.
1,037,688.13
1,037,688.13
39,529.22
39,529.22
60,000
60,000
37,688.13
37,688.13
Cash
Interest receivable
60,000
Interest receivable
Interest income
60,000

60,000
60,000
59,712.99
59,712.99
Cash
Interest receivable
60,000
Interest receivable
Interest income
60,000

Unrealized gain on FVTPL
60,000
60,000
117,576.72
117,576.72
Cash
Interest receivable
60,000
Interest receivable
Interest income
60,000

Unrealized gain on FVTPL
Cash
Interest receivable
Cr.
60,000
60,000
19,504.35
19,504.35
60,000
60,000
Interest receivable
Interest income
Cash
Interest receivable
Cash
Realized loss from sale of securities
Interest income
60,000
60,000
56,016.66
56,016.66
60,000
60,000
1,042,871.01
38,480.41
1,021,351.42
60,000
December 31, 2009

December 31, 2010
December 31, 2011
December 31, 2012
December 31, 2013
December 31, 2014
Fair Value
1,000,000.00
940,287.01
1,057,863.73
1,077,368.09
1,021,351.42
982,871.01
(37,688.13)
(97,401.11)
20,175.60
39,679.96
(16,336.71)
(54,817.12)
Interest receivable
Interest income
60,000

38,480.42
Cash
Interest receivable
1,042,871.01
Market Adjustment
(37,688.13)
(59,712.99)
117,576.72
19,504.35
(56,016.66)
(38,480.42)
1/1/2009

1,037,688.13
37,688.13
12/31/2009
1,000,000.00
59,712.99
12/31/2010
12/31/2012
940,287.01
117,576.72
1,057,863.73
19,504.35
1,077,368.09
56,016.66
12/31/2013
1,021,351.42
38,480.42
12/31/2014
982,871.01
12/31/2011
60,000
38,480.42
60,000
982,871.01
ecurities
37,688.13
59,712.99
56,016.66
38,480.42
Face value
Term
Coupon rate
Coupon
Market yield
Effective yield
1,000,000
10
6%
60000
5.50%
5%
Effective yield
1,077,217.35
December 31, 2009

December 31, 2010
December 31, 2011
December 31, 2012
December 31, 2013
December 31, 2014
December 31, 2015
December 31, 2016
December 31, 2017
Market Yields
6%
7%
5%
4.50%
5.50%
6.50%
5%
4%
3%
December 31, 2009

December 31, 2010
December 31, 2011
December 31, 2012
December 31, 2013
December 31, 2014
December 31, 2015
December 31, 2016
Fair Value
1,000,000.00
940,287.01
1,057,863.73
1,077,368.09
1,021,351.42
982,871.01
1,027,232.48
1,037,721.89
Date
1/1/09
12/31/09
Term Remaining
9
8
7
6
5
4
3
2
1
1/1/10
12/31/10
1/1/11
12/31/11
The investment was sold on December 31, 2016

1/1/12
12/31/12
1/1/13
12/31/13
1/1/14
12/31/14
1/1/15
12/31/15
1/1/16
12/31/16

Cash
Interest receivable
Interest income
Unrealized loss - OCI
Market adjustment - AFS securities
Dr.
1,077,217.35
1,077,217.35
60,000
53,860.87
6,139.13
71,078.22
71,078.22
Cash
Interest receivable
60,000
Interest receivable
Interest income
60,000

60,000
53,553.91
6,446.09
53,266.90
53,266.90
Cash
Interest receivable
60,000
Interest receivable
Interest income
60,000

Unrealized gain - OCI
53,231.61
6,768.39
124,345.11
124,345.11
60,000
Interest receivable
Interest income
60,000
Cash
Interest receivable
investor = you'll pay more for the

The clean price is used to mark to
60,000.00
Cash
Interest receivable

Cr.
60,000
52,893.19
7,106.81
26,611.17
26,611.17
60,000
60,000
Interest receivable
Interest income
60,000
52,537.85
7,462.15
48,554.51
48,554.51
Cash
Interest receivable
60,000
Interest receivable
Interest income
60,000

60,000
52,164.74
7,835.26
30,645.15
30,645.15
Cash
Interest receivable
60,000
Interest receivable
Interest income
60,000

Cash
Interest receivable
Cash
Realized loss from sale of securities
Interest income
60,000
51,772.98
8,227.02
52,558.20
52,558.20
60,000
60,000
1,097,721.89
19,127.79
1,018,594.10
60,000.00
Date
1/1/2009
1/1/2010
1/1/2011
1/1/2012
1/1/2013
1/1/2014
1/1/2015
1/1/2016
1/1/2017
1/1/2018
1/1/2019
Interest
53,860.87
53,553.91
53,231.61
52,893.19
52,537.85
52,164.74
51,772.98
51,361.62
50,929.71
50,476.19
Amortization Table
Payment
Amortization
60,000.00
60,000.00
60,000.00
60,000.00
60,000.00
60,000.00
60,000.00
60,000.00
60,000.00
60,000.00
Laging clean price ang pumapasok sa AFS

Pag nag-annuity due ka, dirty price siya
6,139.13
6,446.09
6,768.39
7,106.81
7,462.15
7,835.26
8,227.02
8,638.38
9,070.29
9,523.81
Principal
1,077,217.35
1,071,078.22
1,064,632.13
1,057,863.73
1,050,756.92
1,043,294.77
1,035,459.51
1,027,232.48
1,018,594.10
1,009,523.81
1,000,000.00
Fair Value
1,000,000.00
940,287.01
1,057,863.73
1,077,368.09
1,021,351.42
982,871.01
1,027,232.48
1,037,721.89
Not comparable sa clean price ng AFS
dirty price = clean price + accrued interest

clean price = PV of future cash flows
or = you'll pay more for the bond due to the accrued interest if bought between interest payment dates (a.k.a dirty price)
ean price is used to mark to market.
Market Adjustment
(71,078.22)
(124,345.11)
0.00
26,611.17
(21,943.34)
(52,588.50)
0.00
19,127.79
(71,078.22)
(53,266.90)
124,345.11
26,611.17
(48,554.51)
(30,645.15)
52,588.50
19,127.79
1/1/2009

1,077,217.35
1,071,078.22
12/31/2009
1,000,000.00
993,553.91
12/31/2010
940,287.01
12/31/2011
933,518.62
124,345.11
1,057,863.73
12/31/2012
1,050,756.92
26,611.17
1,077,368.09
price ng AFS
1,069,905.93
(a.k.a dirty price)

12/31/2013
1,021,351.42
1,013,516.16
12/31/2014
982,871.01
12/31/2015
974,643.98
52,588.50
1,027,232.48
12/31/2016
1,018,594.10
19,127.79
1,037,721.89
vestment in debt securities

6,139.13
71,078.22
6,446.09
53,266.90
6,768.39
7,106.81
7,462.15
48,554.51
7,835.26
30,645.15
8,227.02
8,638.38
Face value
Term
Coupon rate
Coupon
Market yield
Effective yield
1,000,000
10
6%
60000
5.50%
5%
Effective yield
1,077,217.35
Date
1/1/09
12/31/09
1/1/10
December 31, 2009
December 31, 2010
December 31, 2011
December 31, 2012
December 31, 2013
December 31, 2014
December 31, 2015
December 31, 2016
December 31, 2017
Market Yields
6%
7%
5%
4.50%
5.50%
6.50%
5%
4%
3%
Term Remaining
9
8
7
6
5
4
3
2
1
12/31/10
1/1/11
12/31/11
1/1/12
12/31/12
1/1/13
12/31/13
1/1/14
12/31/14
1/1/15
12/31/15
1/1/16
12/31/16
1/1/17
12/31/17
1/1/18
12/31/18
1/1/19

Cash
Dr.
1,077,217.35
Cr.
1,077,217.35
Interest receivable
Interest income
60,000
Cash
Interest receivable
60,000
Interest receivable
Interest income
60,000
Cash
Interest receivable
60,000
Interest receivable
Interest income
60,000
Cash
Interest receivable
60,000
Interest receivable
Interest income
60,000
Cash
Interest receivable
60,000
Interest receivable
Interest income
60,000
Cash
Interest receivable
60,000
Interest receivable
Interest income
60,000
53,860.87
6,139.13
60,000.00
53,553.91
6,446.09
60,000.00
53,231.61
6,768.39
60,000.00
52,893.19
7,106.81
60,000.00
52,537.85
7,462.15
60,000.00
52,164.74
7,835.26
Cash
Interest receivable
60,000
Interest receivable
Interest income
60,000
Cash
Interest receivable
60,000
Interest receivable
Interest income
60,000
Cash
Interest receivable
60,000
Interest receivable
Interest income
60,000
Cash
Interest receivable
60,000
Interest receivable
Interest income
60,000
Cash
Interest receivable
1,060,000
60,000.00
51,772.98
8,227.02
60,000.00
51,361.62
8,638.38
60,000.00
50,929.71
9,070.29
60,000.00
50,476.19
9,523.81
60,000.00
1,000,000.00
Date
1/1/2009
1/1/10
1/1/11
1/1/12
1/1/13
1/1/14
1/1/15
1/1/16
1/1/17
1/1/18
1/1/19
Interest
53,860.87
53,553.91
53,231.61
52,893.19
52,537.85
52,164.74
51,772.98
51,361.62
50,929.71
50,476.19
Amortization Table
Payment
Amortization
60,000
60,000
60,000
60,000
60,000
60,000
60,000
60,000
60,000
60,000
6,139.13
6,446.09
6,768.39
7,106.81
7,462.15
7,835.26
8,227.02
8,638.38
9,070.29
9,523.81
Principal
1,077,217.35
1,071,078.22
1,064,632.13
1,057,863.73
1,050,756.92
1,043,294.77
1,035,459.51
1,027,232.48
1,018,594.10
1,009,523.81
1,000,000.00
Face value
Term
Coupon rate
Coupon
Market yield
Effective yield
1,000,000
10
6%
60000
5.50%
5%
Effective yield
1,077,217.35
December 31, 2009

December 31, 2010
December 31, 2011
December 31, 2012
December 31, 2013
December 31, 2014
December 31, 2015
December 31, 2016
December 31, 2017
Market Yields
6%
7%
5%
4.50%
5.50%
6.50%
5%
4%
3%
December 31, 2009

December 31, 2010
December 31, 2011
December 31, 2012
December 31, 2013
December 31, 2014
December 31, 2015
December 31, 2016
Fair Value
1,000,000.00
940,287.01
1,057,863.73
1,077,368.09
1,021,351.42
982,871.01
1,027,232.48
1,037,721.89
December 31, 2014

December 31, 2015
December 31, 2016
December 31, 2017
Market Yields
6.50%
5%
4%
3%
Term Remaining
9
8
7
6
5
4
3
2
1
Term Remaining
4
3
2
1
The investment was reclassified to AFS on December 31, 2011.

After 2 years, the investment was reclassified to HTM.
Date
1/1/09
12/31/09
1/1/10
12/31/10
1/1/11
12/31/11
1/1/12
12/31/12

Cash
Interest receivable
Interest income
Cash
Interest receivable
Interest receivable
Interest income
Cash
Interest receivable
Interest receivable
Interest income
Cash
Interest receivable
Interest receivable
Interest income
1/1/13
12/31/13
Cash
Interest receivable
Interest receivable
Interest income
1/1/14
Cash
Interest receivable
12/31/14
Interest receivable
Interest income
Interest income
UGL-OCI
1/1/15
12/31/15
Cash
Interest receivable
Interest receivable
Interest income
Interest income
UGL-OCI
1/1/16
12/31/16
Cash
Interest receivable
Interest receivable
Interest income
Interest income
UGL-OCI
1/1/17
12/31/17
Cash
Interest receivable
Interest receivable
Interest income
Interest income
UGL-OCI
1/1/18
Cash
Interest receivable
12/31/18
Interest receivable
Interest income
Interest income
UGL-OCI
1/1/19
Cash
Interest receivable
Dr.
1,077,217.35
Cr.
1,077,217.35
60,000
53,860.87
6,139.13
60,000
60,000.00
60,000
53,553.91
6,446.09
60,000
60,000.00
60,000
53,231.61
6,768.39
Date
1/1/2009
1/1/10
1/1/11
1/1/12
1/1/13
1/1/14
1/1/15
1/1/16
1/1/17
1/1/18
1/1/19
12/31/14
12/31/15
12/31/16
12/31/17
12/31/18
60,000
60,000.00
60,000
52,893.19
7,106.81
26,611.17
26,611.17
60,000
60,000.00
60,000
Reclassification entry:
52,537.85 Inv in bonds - HTM
7,462.15 Inv in bonds - AFS
48,554.51
48,554.51
60,000.00
21,944
1,021,351
60,000.00
60,000.00
56,174.33
3,825.67
4,009.59
4,009.59
60,000.00
60,000.00
60,000.00
55,963.92
4,036.08
4,190.94
4,190.94
60,000.00
60,000.00
60,000.00
55,741.93
4,258.07
4,380.31
4,380.31
60,000.00
60,000.00
60,000.00
55,507.74
4,492.26
4,578.03
4,578.03
60,000.00
60,000.00
60,000.00
55,260.66
4,739.34
4,784.47
4,784.47
1,060,000.00
60,000.00
1,000,000.00
Interest
53,860.87
53,553.91
53,231.61
52,893.19
52,537.85
52,164.74
51,772.98
51,361.62
50,929.71
50,476.19
256,705.23
56174.3282307953
55963.916283489
55741.9316790809
55507.7379214303
55260.663507109
278648.577621904
21,943.34
1,043,295
Amortization Table
Payment
Amortization
60,000
60,000
60,000
60,000
60,000
60,000
60,000
60,000
60,000
60,000
60,000
60,000
60,000
60,000
60,000
6,139.13
6,446.09
6,768.39
7,106.81
7,462.15
7,835.26
8,227.02
8,638.38
9,070.29
9,523.81
Principal
1,077,217.35
1,071,078.22
1,064,632.13
1,057,863.73
1,050,756.92
1,043,294.77
1,035,459.51
1,027,232.48
1,018,594.10
1,009,523.81
1,000,000.00
-3,826
-4,036
-4,258
-4,492
-4,739
1,021,351.42
1,017,525.75
1,013,489.67
1,009,231.60
1,004,739.34
1,000,000.00
Fair Value
1,000,000.00
940,287.01
1,057,863.73
1,077,368.09
1,021,351.42
982,871.01
1,027,232.48
1,037,721.89
Market Adjustment
26,611.17
(21,943.34)
(52,588.50)
26,611.17
(48,554.51)
(30,645.15)
Face value
Term
Coupon rate
Coupon
Market yield
Effective yield
1,000,000
10
6%
60000
5.50%
5%
December 31, 2009

December 31, 2010
December 31, 2011
December 31, 2012
December 31, 2013
December 31, 2014
December 31, 2015
December 31, 2016
December 31, 2017
Market Yields
6%
7%
5%
4.50%
5.50%
6.50%
5%
4%
3%
December 31, 2009

December 31, 2010
December 31, 2011
December 31, 2012
December 31, 2013
December 31, 2014
December 31, 2015
December 31, 2016
Fair Value
1,000,000.00
940,287.01
1,057,863.73
1,077,368.09
1,021,351.42
982,871.01
1,027,232.48
1,037,721.89
FVTPL
Term Remaining
9
8
7
6
5
4
3
2
1
AFS
HTM
Dr.
Interest receivable
Investment in FVTPL
Cash
Cr.
30,000
1,036,263.72
1,066,263.72
Brokerage fees and commissions

Cash
37,958.93

Investment in FVTPL
<At year-end>
36,263.72
Interest receivable
Interest income
<At year-end>
37,958.93
36,263.72
30,000
30,000
Interest receivable
Investment in FVTPL
Cash
30,000
1,074,222.65
Interest receivable
Interest income
Investment in FVTPL
<At year-end>
30,000
UGL - OCI
Market adjustment - AFS
<At year-end>
1,104,222.65
26,855.57
3,144.43
71,078.22
71,078.22
Interest receivable
Investment in FVTPL
Cash
30,000
1,074,222.65
Interest receivable
Interest income
Investment in FVTPL
<At year-end>
30,000
FV at 12/31/09 (5%)
Accrued interest
Total
Purchase price
1,104,222.65
26,855.57
3,144.43
5.00%
1,071,078.22
30,000.00
1,101,078.22
1,074,222.65
5.50%
1,034,760.98
30,000.00
1,064,760.98
1,036,263.72
Brokerage fee
37,958.93
Notes:
Purchase price normally includes the accrued interest
That portion of the purchase price representing accrued interest should not be reported as part of the cost of investment but shou
On the date of acquisition, the accrued interest is charged either to accrued interest receivable or interest income.
When accrued interest receivable is debited, upon receipt of the first interest payment, the accrued interest receivable is closed a
When interest income is debited, the receipt of the first interest payment is credited entirely to interest income.
of the cost of investment but should be accounted for separately.

or interest income.
ued interest receivable is closed and interest income is credited for the excess.
terest income.

ABC Company

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ABC Company

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Face value

December 31, 2009

The investment was sold on December 31, 2014

Investment in debt securities

Unrealized loss on FVTPL

Investment in debt securities

Investment in debt securities

December 31, 2009

Unrealized loss on FVTPL

Investment in debt securities

December 31, 2009

December 31, 2009

The investment was sold on December 31, 2016

Investment in debt securities

Unrealized loss - OCI

Market adjustment - AFS securities

investor = you'll pay more for the

Market adjustment - AFS securities

Unrealized loss - OCI

Market adjustment - AFS securities

Laging clean price ang pumapasok sa AFS

Not comparable sa clean price ng AFS

dirty price = clean price + accrued interest

Investment in debt securities

(a.k.a dirty price)

vestment in debt securities

Investment in debt securities

December 31, 2009

December 31, 2009

December 31, 2014

The investment was reclassified to AFS on December 31, 2011.

Investment in debt securities

December 31, 2009

December 31, 2009

Brokerage fees and commissions

Unrealized loss on FVTPL

of the cost of investment but should be accounted for separately.

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