Yuen Long Carecenters provides financing and capital to the heal

Yuen Long Carecenters provides financing and capital to the healthcare industry, with a particular focus on nursing homes for the elderly. The following selected transactions relate to bonds acquired as an investment by Yuen Long, whose fiscal year ends on December 31.
2011
Jan. 1 Purchased at face value HK$2,000,000 of Hannon Nursing Centers, 10-year. 8% bonds dated January 1, 2011, directly from Hannon.
July 1 Received the semiannual interest on the Hannon bonds.
Dec. 31 Accrual of interest at year-end on the Harmon bonds.
(Assume that all intervening transactions and adjustments have been properly recorded and that the number of bonds owned has not changed from December 31, 2011, to December 31, 2013.)
2014
Jan. 1 Received the semiannual interest on the Hannon bonds.
Jan. 1 Sold HK$1,000,000 Hannon bonds at 106.The broker deducted HK$6,000 for commissions and fees on the sale.
July 1 Received the semiannual interest on the Hannon bonds.
Dec. 31 Accrual of Interest at year-end on the Harmon bonds.

Instructions
(a) Journalize the listed transactions for the years 2011 and 2014.
(b) Assume that the fair value of the bonds at December 31, 2011, was HK$2,200,000. These bonds are classified as available-for-sale securities. Prepare the adjusting entry to record these bonds at fair value.
(c) Based on your analysis in part (b), show the statement of financial position presentation of the bonds and interest receivable at December 31, 2011. Assume the investments are considered long-term. Indicate where any unrealized gain or loss is reported in the financial statements.

Broker
A broker is someone or something that acts as an intermediary third party, managing transactions between two other entities. A broker is a person or company authorized to buy and sell stocks or other investments. They are the ones responsible for...
Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...

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