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Determine journal entry to record the sale of the investment

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Reference no: EM132602047

On December 31, 20X5, Gretta Inc., which reports its financial results in accordance with IFRS, had an investment at FVOCI-elect in Gidget Corp. Gretta initially paid $13,000 for the investment. Its fair value at December 31, 20X5, was $14,000. On February 15, 20X6, Gretta sold its investment in Gidget for $14,600. Gretta's policy is to transfer previously unrealized holding gains and losses to retained earnings when the investment is derecognized.

Question 1: The journal entry to record the sale of the investment in Gidget would include which of the following?

Option a) Credit gain on sale - P&L for $600

Option b) Debit OCI $1,000 (net)

Option c) Credit gain on derecognition - P&L for $1,600

Option d) Credit retained earnings $1,600

Reference no: EM132602047

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