15, please answer the following question. thanks On January 1, 2021, Novak Ltd. paid $316,289.83 for 12% bonds of Variation Ltd. with a maturity value of $294,000. The bondsprovide the bondholders with a 10% yield. They are dated January 1, 2021, mature on January 1, 2026, and pay interest eachDecember 31. Novak 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, Novak's year end, the bonds had a fair value of $314,300.00.During 2022, the economic outlook related to Variation's primary business took a major downturn, so that Variation's debt wasdowngraded. 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 atDecember 31, 2024.(b)Your Answer Correct Answer (Used)Prepare the entries to record Novak's purchase of the bonds on January 1, 2021, the recognition of interest income and interestreceived on December 31, 2021, and the fair value adjustment required at December 31, 2021. (Credit account titles areautomatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titlesand enter O for the amounts. List all debit entries before credit entries. Round answers to 2 decimal places, e.g. 52.75.)DateJan. 1, 2021Dec. 31, 2021Account Titles and ExplanationFV-NI InvestmentsCashCashInvestment Income or Loss(To record collection of interest)Investment Income or LossFV-NI Investments(To record fair value adjustment)Debit316,289.8335,280.001,989.83Credit316,235,211,9 Prepare all entries required for 2022, including recognition of the impairment in value if necessary, and for 2023. (Credit accounttitles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for theaccount titles and enter O for the amounts. List all debit entries before credit entries. Round answers to 2 decimal places, e.g. 52.75.)DateDec. 31,2022Dec. 31,2023Account Titles and Explanation(To record collection of interest)(To record fair value adjustment)(To record interest income)(To record fair value adjustment)DebitILCredit11

Debt securities are the financial instrument which provides a fixed amount of interest to the…

On January 1, 2021, Novak Ltd. paid $316,289.83 for 12% bonds of Variation Ltd. with a maturity value of $294,000. 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. Novak 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, Novak's year end, the bonds had a fair value of $314,300.00. 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.