Two years ago, SPI purchased 10-year bonds of another public company for $350,000. The bonds were classified
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Question:
Two years ago, SPI purchased 10-year bonds of another public company for $350,000. The bonds were classified as amortized cost as management had determined to keep the bonds until maturity. During the current year, the bonds increased in value by $40,000 as central banks began to lower interest rates. At the beginning of the year, management reclassified the bonds to FVTPL as the company plans on selling the bonds in five years.
What is the appropriate accounting treatment?
Please provide journal entries
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