Question: On 1 July 20X2 a company bought an investment in
On 1 July 20X2, a company bought an investment in IBM bonds at par for US$ 50,000 when the exchange rate was US$ 1 = Cdn$ 1.12. The investment is classified as FVTPL. The company paid cash on the acquisition date. At 31 December, the exchange rate was US$ 1 = Cdn$ 1.09. The fair value was US$ 52,000. Prepare journal entries to record the purchase of bonds and any adjusting entries at year-end. Disregard any interest accrual.
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