Requirements: 1. Prepare the necessary journal entries to record the above transactions assuming the investment is classified as trading security? Investment at FVTOCI? Investment at amortized cost? 2 Compute the unrealized holding gain or loss of the investment, assuming the investment is classified as trading security? Investment at FVTOCI? Investment at amortized cost? 3. How much is the carrying value of the investment at each reporting period assuming the investment is classified as trading security? Investment at FVTOCI? Investment at amortized cost?

Requirements: 1. Prepare the necessary journal entries to record the above transactions assuming the investment is classified as trading security? Investment at FVTOCI? Investment at amortized cost? 2 Compute the unrealized holding gain or loss of the investment, assuming the investment is classified as trading security? Investment at FVTOCI? Investment at amortized cost? 3. How much is the carrying value of the investment at each reporting period assuming the investment is classified as trading security? Investment at FVTOCI? Investment at amortized cost?

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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Question

PROBLEM 23
Adrian Henry Company purchased P2,000,.000, 12%, 4-year bonds at 102, excluding the interest on
April 1, 2020. The interest is payable on February 1 and August 1. At the end of each year, the bonds
have the following quoted price:
Dec. 31, 2020
Dec. 31, 2021
-102 1/2
-101 3/4
Dec. 31, 2022
-103 1/4
On February 1, 2023, Adrian Henry sold half of its bonds to the market at 102 3/4.
Requirements:
1. Prepare the necessary journal entries to record the above transactions assuming the investment
is classified as trading security? Investment at FVTOCI? Investment at amortized cost?
2. Compute the unrealized holding gain or loss of the investment, assuming the investment is
classified as trading security? Investment at FVTOCI? Investment at amortized cost?
3. How much is the carrying value of the investment at each reporting period assuming the
investment is classified as trading security? Investment at FVTOCI? Investment at amortized
cost?

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