On January 0 1 , 2 0 2 4 , ABC Corp. purchased XYZ Company bonds when
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Question:
On January ABC Corp. purchased XYZ Company bonds when the market interest rate was The XYZ bonds had a $ maturity value, paid interest semiannually on June th and December st and had a six year life. ABC Corp.s yearend is at December
ABC Corp uses IFRS for reporting purposes and has classified this investment as an Amortized Cost AC investment for financial reporting purposes.
Please refer to the PV tables provided in the course
Required:
a Calculate the price paid by ABC Corp. for the bonds.
b Prepare the journal entry to record the purchase of the bonds.
c Complete the table below that shows the interest revenue, carrying value of bonds, using the effective interest method.
Period
Cash Payment
Interest Revenue
Amortization
Carry Value
a
b
c
d
e
f
g
h
i
j
k
l
m
n
o
p
d Provide the journal entry to record the interest revenue on June
e Explain the major difference in accounting treatments between AC investments and FVOCI Investments ie: what do we need to do for FVOCI investments that we don't need to do for AC investments no calculations required for this part.
Related Book For
Fundamental Accounting Principles Volume II
ISBN: 978-1259066511
14th Canadian Edition
Authors: Larson Kermit, Jensen Tilly
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