On October 1, Novak Ltd. purchased 9% bonds with a face value of $1,000 for trading purposes, accounting for the investment at FV- NI. The bonds were priced at 1.023 to yield Novak 6% and pay interest annually each October 1. Novak has a December 31 year end, and at this date, the bonds' fair value was $1,055. Assume Novak applies IFRS. Your Answer Prepare Novak's journal entry for the purchase of the investment. (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 debit entry before credit entry.) Correct Answer (Used) Account Titles and Explanation (b) FV-NI Investments Cash Your answer is incorrect. Debit Account Titles and Explanation 1,023 Debit Credit Prepare Novak's journal entry for the December 31 interest accrual. (Round answers to 2 decimal places, e.g. 52.75. 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 debit entry before credit entry.) 1,023 Credit
On October 1, Novak Ltd. purchased 9% bonds with a face value of $1,000 for trading purposes, accounting for the investment at FV- NI. The bonds were priced at 1.023 to yield Novak 6% and pay interest annually each October 1. Novak has a December 31 year end, and at this date, the bonds' fair value was $1,055. Assume Novak applies IFRS. Your Answer Prepare Novak's journal entry for the purchase of the investment. (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 debit entry before credit entry.) Correct Answer (Used) Account Titles and Explanation (b) FV-NI Investments Cash Your answer is incorrect. Debit Account Titles and Explanation 1,023 Debit Credit Prepare Novak's journal entry for the December 31 interest accrual. (Round answers to 2 decimal places, e.g. 52.75. 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 debit entry before credit entry.) 1,023 Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
9. please answer the following question. thanks
Transcribed Image Text:On October 1, Novak Ltd. purchased 9% bonds with a face value of $1,000 for trading purposes, accounting for the investment at FV-
NI. The bonds were priced at 1.023 to yield Novak 6% and pay interest annually each October 1. Novak has a December 31 year end,
and at this date, the bonds' fair value was $1,055. Assume Novak applies IFRS.
(a)
Your Answer
Prepare Novak's journal entry for the purchase of the investment. (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 debit
entry before credit entry.)
Correct Answer (Used)
Account Titles and Explanation
(b)
FV-NI Investments
Cash
Your answer is incorrect.
Debit
Account Titles and Explanation
1,023
Debit
Credit
Prepare Novak's journal entry for the December 31 interest accrual. (Round answers to 2 decimal places, e.g. 52.75. 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 debit entry before credit entry.)
1,023
Credit
Transcribed Image Text:Accumulated Other Comprehensive Income
Allowance for Investment Impairment
Bond Investment at Amortized Cost
Cash
Commission Expense
Dividends Receivable
Dividend Revenue
FV-NI Investments
FV-OCI Investments
Gain on Disposal of Investments - FV-NI
Gain on Disposal of Investments in Associate
Gain on Disposal of Investments - Cost/Amortized Cost
Gain on Disposal of Investments - FV-NI
Gain on Disposal of Investments - FV-OCI
Gain or Loss in Value of Investment Property
GST Receivable
Interest Expense
Interest Income
Interest Payable
Interest Receivable
Investment in Associate
Investment Income or Loss
Loss on Discontinued Operations
Loss on Disposal of Investments - Cost/Amortized Cost
Loss on Disposal of Investments - FV-NI
Loss on Disposal of Investments - FV-OCI
Loss on Impairment
No Entry
Note Investment at Amortized Cost
Other Investments
Recovery of Loss from Impairment
Retained Earnings
Unrealized Gain or Loss
Unrealized Gain or Loss - OCI
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