Make journal entries for the purchase of the investment

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Strange Corporation purchased $60,400 of 6-year, 7% bonds of Kaecilius Inc. for $57,566 to yield an 8% return, and classified the purchase as an amortized cost method investment. The bonds pay interest semi-annually.

Required

Question 1. Assuming Strange Corporation applies IFRS, prepare its journal entries for the purchase of the investment and receipt of semi-annual interest and discount amortization for the first two interest payments that will be received.

Question 2. Assuming Strange applies ASPE and has chosen the straight-line method of discount amortization, prepare the same three entries requested in part 1.

Reference no: EM132607222

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