Question: On March 31 Ramesh Corp invests in a 1 000 6

On March 31, Ramesh Corp. invests in a $1,000, 6% bond to be held for short-term trading purposes, and accounts for this investment using the FV-NI method. The bond's fair value when acquired was $970, but an additional S1O was paid (and debited to Interest Receivable) representing the interest accrued since the annual interest payment date of February 1. Ramesh applies IFRS, does not report interest separately from other investment income, and prepares financial statements each December 31. The fair value of the bond on December 31 is $963, and on February 1 when Ramesh sells the bond, is S961. Prepare journal entries to record
(a) The purchase of the bond,
(b) Any December 31 adjustments needed,
(c) The receipt of interest on February I, and
(d) The sale of the bond on February 1. Ramesh Corp. does not use reversing entries.

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  • CreatedSeptember 18, 2015
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