On 1 June 2023 Safe Boards Ltd invested in five hundred 7 per cent, ten-year Teleco bonds with a face value of $100 each. The bonds were issued at face value. On 30 June 2023, the Teleco bonds, which are traded in an active market, had a market value of $105. Answer each part independently.

a) State whether Safe Boards Ltd can classify the Teleco bonds as being measured at amortized cost. If measured at amortized cost, give the amount at which the bonds should be reported in the statement of financial position at 30 June 2023. (2.5 marks)
b) If the bonds were acquired for speculative purposes, give the amount at which the bonds should be reported in the statement of financial position at 30 June 2023. If a change in fair value is recognized, where should it be recognized? (2.5 marks)

Answer rating: 100% (QA)

A Safe Boards can classify the Telco bonds as being measure... View the full answer