Reference no: EM132600738
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?
a) Credit gain on sale - P&L for $600
b) Debit OCI $1,000 (net)
c) Credit gain on derecognition - P&L for $1,600
d) Credit retained earnings $1,600