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 accounting issue? if there is one

What is the appropriate accounting entries? ( please include journal entries)

How does it affect revenue or earnings.

Answer rating: 100% (QA)

The accounting issue in this scenario is the change in classification of the bonds from amortized co... View the full answer