On January 1, 2015, NorthCo purchased $90,000,000 in 9% bonds that will mature in 5 years. Management has the positive intent and ability to hold the bonds until maturity. For bonds of similar risk and maturity, the market yield was 10%. Interest is received semiannually on June 30 and December 31. NorthCo follows IFRS. Prepare journal entries for the following transactions. Please make sure your final answer(s) are accurate to the nearest whole number. Enter an appropriate description when entering the transactions in the journal. Dates must be entered in the format dd/mmm (ie. January 15 would be 15/Jan). 

a) Prepare the journal entry to record NorthCo's investment on January 1, 2015. 

b) Prepare the journal entry by NorthCo to record interest on June 30, 2015. 

c) Prepare the journal entry by NorthCo to record interest on December 31, 2015. 

d) At what carrying value will NorthCo report its investment as at December 31, 2015? 

Answer rating: 100% (QA)

Journal Entries in the books of NorthCo 1 Entry for the Investment made on 01Jan Debit ... View the full answer