On January 1, 2020 Alpha Ltd. invested $1,812,298 in bonds with a face value of $2,000,000, with

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On January 1, 2020 Alpha Ltd. invested $1,812,298 in bonds with a face value of $2,000,000, with a nominal interest rate of 6%, and semi-annual interest payments on June 30 and December 31 each year. The market rate of interest was 8% on January 1, 2020 and the bonds were set to mature in 6 years. The bonds had a market value of $1,980,000 on December 31, 2020. Alpha Ltd. uses IFRS.

Required

a) Using the Amortized Cost model, prepare all journal entries required on December 31, 2020.

b) Using the Fair Value through Net Income model, prepare all journal entries required on December 31, 2020.

Related Book For answer-question

Intermediate Accounting

ISBN: 978-0077400163

6th edition

Authors: J. David Spiceland, James Sepe, Mark Nelson

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Posted Date: Jun 20, 2022 06:42 AM

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On January 1, 2020 Alpha Ltd. invested $1,812,298 in bonds with a face value of $2,000,000, with

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a Under the amortized cost method the debt investment 3T is initially rec... View the full answer

Intermediate Accounting

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