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Current Attempt in Progress On January 1, 2021, Blue Spruce Ltd. paid $380,838.77 for 12% bonds of Variation Ltd. with a maturity value of $354,000. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2021, mature on January 1, 2026, and pay interest each December 31. Blue Spruce acquired the bond investment as part of its portfolio of trading securities and it accounts for the bonds at FV-NI, following IFRS. At December 31, 2021, Blue Spruce's year end, the bonds had a fair value of $378,400.00. (c) During 2022, the economic outlook related to Variation's primary business took a major downturn, so that Variation's debt was downgraded. By the end of 2022, the bonds were priced at 85.5, and at December 31, 2023, they were selling in the market at 87. Conditions reversed in 2024 and the outlook for Variation significantly improved, leaving its bonds with a fair value of 99.5 at December 31, 2024. Show Transcribed Text Prepare all entries required for 2022, including recognition of the impairment in value if necessary, and for 2023. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries. Round answers to 2 decimal places, e.g. 52.75.) Date Dec. 31, 2022 Dec. 31, 2023 Account Titles and Explanation (To record collection of interest) (To record fair value adjustment) Debit Credit

Current Attempt in Progress On January 1, 2021, Blue Spruce Ltd. paid $380,838.77 for 12% bonds of Variation Ltd. with a maturity value of $354,000. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2021, mature on January 1, 2026, and pay interest each December 31. Blue Spruce acquired the bond investment as part of its portfolio of trading securities and it accounts for the bonds at FV-NI, following IFRS. At December 31, 2021, Blue Spruce's year end, the bonds had a fair value of $378,400.00. (c) During 2022, the economic outlook related to Variation's primary business took a major downturn, so that Variation's debt was downgraded. By the end of 2022, the bonds were priced at 85.5, and at December 31, 2023, they were selling in the market at 87. Conditions reversed in 2024 and the outlook for Variation significantly improved, leaving its bonds with a fair value of 99.5 at December 31, 2024. Show Transcribed Text Prepare all entries required for 2022, including recognition of the impairment in value if necessary, and for 2023. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries. Round answers to 2 decimal places, e.g. 52.75.) Date Dec. 31, 2022 Dec. 31, 2023 Account Titles and Explanation (To record collection of interest) (To record fair value adjustment) Debit Credit

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Current Attempt in Progress (c) Show Transcribed Text On January 1, 2021, Blue Spruce Ltd. paid $380,838.77 for 12% bonds of Variation Ltd. with a maturity value of $354,000. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2021, mature on January 1, 2026, and pay interest each December 31. Blue Spruce acquired the bond investment as part of its portfolio of trading securities and it accounts for the bonds at FV-NI, following IFRS. At December 31, 2021, Blue Spruce's year end, the bonds had a fair value of $378,400.00. During 2022, the economic outlook related to Variation's primary business took a major downturn, so that Variation's debt was downgraded. By the end of 2022, the bonds were priced at 85.5, and at December 31, 2023, they were selling in the market at 87. Conditions reversed in 2024 and the outlook for Variation significantly improved, leaving its bonds with a fair value of 99.5 at December 31, 2024. Date Account Titles and Explanation Dec. 31, 2022 Ĵ Dec. 31, 2023 Prepare all entries required for 2022, including recognition of the impairment in value if necessary, and for 2023. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries. Round answers to 2 decimal places, e.g. 52.75.) (To record collection of interest) c (To record fair value adjustment) 3 Ć Debit Credit
Transcribed Image Text:Current Attempt in Progress (c) Show Transcribed Text On January 1, 2021, Blue Spruce Ltd. paid $380,838.77 for 12% bonds of Variation Ltd. with a maturity value of $354,000. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2021, mature on January 1, 2026, and pay interest each December 31. Blue Spruce acquired the bond investment as part of its portfolio of trading securities and it accounts for the bonds at FV-NI, following IFRS. At December 31, 2021, Blue Spruce's year end, the bonds had a fair value of $378,400.00. During 2022, the economic outlook related to Variation's primary business took a major downturn, so that Variation's debt was downgraded. By the end of 2022, the bonds were priced at 85.5, and at December 31, 2023, they were selling in the market at 87. Conditions reversed in 2024 and the outlook for Variation significantly improved, leaving its bonds with a fair value of 99.5 at December 31, 2024. Date Account Titles and Explanation Dec. 31, 2022 Ĵ Dec. 31, 2023 Prepare all entries required for 2022, including recognition of the impairment in value if necessary, and for 2023. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries. Round answers to 2 decimal places, e.g. 52.75.) (To record collection of interest) c (To record fair value adjustment) 3 Ć Debit Credit
Dec. 31, 2022 Dec. 31, 2023 (To record collection of interest) (To record fair value adjustment) (To record interest income) (To record fair value adjustment)
Transcribed Image Text:Dec. 31, 2022 Dec. 31, 2023 (To record collection of interest) (To record fair value adjustment) (To record interest income) (To record fair value adjustment)
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