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.
Answer to relevant QuestionsEquity income, and consolidated income, is usually lower than one would predict by simply adding the investor’s income and the pro- rata share of the investee’s income. Why does this happen?Assume that Company R acquired, as a long- term investment, 30% of the out-standing voting common shares of Company S at a cash cost of $ 100,000. At the date of acquisition, Company S reported net assets and total ...In May 20X1, a group of outdoor enthusiasts formed Wild Ones Limited (Wild Ones). Wild Ones operates in central Newfoundland and is involved in a variety of outdoor adventure activities. Start- up capital was provided from ...Consider the following investment categories: A. AC investment B. FVTPL investment C. FVTOCI investmentD. Associate E. Subsidiary F. Joint venture G. Cost An investor company that is a public company has the following items: ...London Ltd. reported the following transactions and information regarding the shares of Dolma Corp: • 15 October 20X2, purchased 3,000 shares at $ 42 per share plus $ 1,200 commission. • 1 December 20X2, received $ 0.50 ...
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