Reference no: EM133001441

Problem 1: Debt investment at fair value through profit or loss (PFRS 9) should be recorded at

Option 1: lower of cost or market value

Option 2: higher of cost or market value

Option 3: fair value

Option 4: fair value plus brokerage fees and other costs incidents to the purchase

Problem 2: How is the premium or discount on bonds purchased as debt investment at amortized cost generally reported in financial statements?

Option 1: as an integral part of the cost of the asset acquired and amortized over the remaining life of the bond issue

Option 2: as an integral part of the cost of the asset acquired until such time as the investment is sold

Option 3: as expense or revenue in the period the bonds are purchased

Option 4: as an integral part of the cost of the asset acquired and amortized over the period the bonds are expected to be held.

Problem 3: An investor purchased a bond as a long term investment in between interest dates at a premium. At the purchase date, the cash paid to the seller is:

Option 1: the same as the face amount of the bond

Option 2: the same as the face amount of the bond plus accrued interest

Option 3: more than the face amount of the bond

Option 4: less than the face amount of the bond