Prepare the journal entries for the transactions

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Question - The following are the transactions of Flower Bhd, which were completed during the fiscal year.

a) Flower Bhd purchased 2,000 securities of Titan Company at a price of $5 each with the prospect of selling them in the future when their value appreciate. The brokerage fee for this purchase is $1,350.

b) Flower Bhd purchased $100,000 of the government's 5% bond, paying at a price of 103.50%. Flower Bhd also paid $1,700 for the brokerage fees.

Flower Bhd sold half of the shares of Titan Company that it previously bought at a price $7 per share.

Required -

a) Explain how Flower Bhd would classify its investments in Titan Company.

b) Prepare the journal entries for the transactions in accordance with the current applicable accounting standards for financial instruments.

Reference no: EM133153312

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