Martha had the following investments in the year 2019 and 2020:

In 2021, Martha sold the investment in Tara Co. for $38,200, and paid transaction costs of $650. 

 Required:

A) Figure out all the journal entries in 2019 and 2020 assuming that: 

i) The investments are classified as FVTPL investments. 

ii) The investments are classified as FVTOCI investments. Also, calculate the balance of AOCI on December 31, 2020, and indicate whether the balance is debit or credit.

Transcribed Image Text:

Investment Share of Joanne Inc. Share of Tara Co. Share of Ally Inc. Share of Sam Co. Date Purchase May 1, 2019 June 30, 2019 of Purchase price Transaction fees October 1, 2019 April 1, 2020 $65,000 32,000 86,000 25,000 $500 200 1000 300 Fair value Fair value on on December 31, 2019 $63,500 35,000 87,500 December 31, 2020 65,500 Sold 86,500 28,000 Investment Share of Joanne Inc. Share of Tara Co. Share of Ally Inc. Share of Sam Co. Date Purchase May 1, 2019 June 30, 2019 of Purchase price Transaction fees October 1, 2019 April 1, 2020 $65,000 32,000 86,000 25,000 $500 200 1000 300 Fair value Fair value on on December 31, 2019 $63,500 35,000 87,500 December 31, 2020 65,500 Sold 86,500 28,000