A company was formed on January 1, 20x4. An analysis of the Investments account as at...

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A company was formed on January 1, 20x4. An analysis of the Investments account as at December 31, 20x5 is as follows: Dec 31, 20x4 Feb 15, 20x5 Mar 30, 20x5 Sep 10, 20x5 Dec 31, 20x5 Opening balance Purchase Shurman Inc. shares - classified as FVTOCI; net of $4,500 of brokerage fees Sold Bailey Inc. shares; net of $3,600 of brokerage fees Sold Alemari Corp shares; net of $900 of brokerage fees Ending balance The opening balance was made up of the following investments: Jacob Inc. shares (FVTOCI) - original cost = $200,000 Bailey Inc. shares (FVTOCI) - original cost = $350,000 Ventura Inc. shares (FVTOCI) – original cost = $190,000 Pacebo Inc. shares (FVTPL) - original cost = $150,000 Alemari Corp. shares (FVTPL) - original cost = $80,000 Mullin Corp. bonds (Amortized Cost) Peric Corp. bonds (FVTOCI) $1,653,982 360,000 (335,000) (125,000) $1,553,982 $280,000 310,000 220,000 110,000 95,000 208,982 430,000 $1,653,982 The Mullin Corporation bonds were purchased on June 30, 20x4 for $209,786. The bonds mature on December 31, 20x9, have a face value of $200,000 and a coupon rate of 5%. The coupon payments are made on June 30 and December 31 of every year. The coupon payments received in 20x5 were credited to revenue. The Peric Corporation bonds were purchased on January 2, 20x4 for $403,052. The bonds mature on December 31, 20x7, have a face value of $500,000 and a coupon rate of 4%. The coupon payments are made on June 30 and December 31 of every year. The coupon payments received in 20x5 were credited to revenue. Fair values at December 31, 20x5 are as follows: Jacob Inc. Ventura Inc. Placebo Inc. Mullin Corp. Peric Corp. Shurman Inc. $265,000 215,000 135,000 215,500 395,000 210,000 $1,435,500 2 The unadjusted trial balance as at December 31, 20x5 shows a credit balance of $76,135 in the A*OCI-Revaluation Gain on FVTOCI Investments account. Required - The CFO would like to create separate accounts for FVTPL, FVTOCI and Amortized Cost Investments, i.e. three accounts instead of one. Prepare the necessary adjusting journal entries at December 31, 20x5 relating to the company's investments. In addition, calculate the adjusted ending balance in the A*OCI-Revaluation Gain on FVTOCI Investments account as at Dec. 31, 20x5. A company was formed on January 1, 20x4. An analysis of the Investments account as at December 31, 20x5 is as follows: Dec 31, 20x4 Feb 15, 20x5 Mar 30, 20x5 Sep 10, 20x5 Dec 31, 20x5 Opening balance Purchase Shurman Inc. shares - classified as FVTOCI; net of $4,500 of brokerage fees Sold Bailey Inc. shares; net of $3,600 of brokerage fees Sold Alemari Corp shares; net of $900 of brokerage fees Ending balance The opening balance was made up of the following investments: Jacob Inc. shares (FVTOCI) - original cost = $200,000 Bailey Inc. shares (FVTOCI) - original cost = $350,000 Ventura Inc. shares (FVTOCI) – original cost = $190,000 Pacebo Inc. shares (FVTPL) - original cost = $150,000 Alemari Corp. shares (FVTPL) - original cost = $80,000 Mullin Corp. bonds (Amortized Cost) Peric Corp. bonds (FVTOCI) $1,653,982 360,000 (335,000) (125,000) $1,553,982 $280,000 310,000 220,000 110,000 95,000 208,982 430,000 $1,653,982 The Mullin Corporation bonds were purchased on June 30, 20x4 for $209,786. The bonds mature on December 31, 20x9, have a face value of $200,000 and a coupon rate of 5%. The coupon payments are made on June 30 and December 31 of every year. The coupon payments received in 20x5 were credited to revenue. The Peric Corporation bonds were purchased on January 2, 20x4 for $403,052. The bonds mature on December 31, 20x7, have a face value of $500,000 and a coupon rate of 4%. The coupon payments are made on June 30 and December 31 of every year. The coupon payments received in 20x5 were credited to revenue. Fair values at December 31, 20x5 are as follows: Jacob Inc. Ventura Inc. Placebo Inc. Mullin Corp. Peric Corp. Shurman Inc. $265,000 215,000 135,000 215,500 395,000 210,000 $1,435,500 2 The unadjusted trial balance as at December 31, 20x5 shows a credit balance of $76,135 in the A*OCI-Revaluation Gain on FVTOCI Investments account. Required - The CFO would like to create separate accounts for FVTPL, FVTOCI and Amortized Cost Investments, i.e. three accounts instead of one. Prepare the necessary adjusting journal entries at December 31, 20x5 relating to the company's investments. In addition, calculate the adjusted ending balance in the A*OCI-Revaluation Gain on FVTOCI Investments account as at Dec. 31, 20x5.

Answer rating: 100% (QA)

To create separate accounts for FVTPL Fair Value Through Profit or Loss FVTOCI Fair Value Through Other Comprehensive Income and Amortized Cost Invest... View the full answer