Reference no: EM133106916
Question - On January 1, 2017, A Corp. acquired 8%, $100,000 par value bonds of B Ltd., to yield 6%. The bonds were dated January 1, 2017, and mature on December 31, 2021, with interest payable each January 1. Pluto intends to hold the bonds to maturity and collect all principal and interest payments to maturity. The market value of the bond at December 31, 2017 was $109,000 and at December 31, 2018 was $107,000.
Pluto follows IFRS.
Required - Prepare the following entries in A's books:
a) Acquisition of bonds on January 1, 2017.
b) Year-end adjusting entry at December 31, 2017.
c) Receipt of the first interest payment on January 1, 2018.
d) Year-end adjusting entry at December 31. 2018.
e) What is the SFP value for these bonds on December 31, 2017?
f) What is the additional journal entry at December 31, 2017 if A company classifies the bond as FVOCI?
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