Rell Corporation reports under IFRS No. 9. Rell has an investment in Tirish, Inc. bonds the Rell accounts for at amortized cost, given that the bonds pay only interest and principal and Rell's business purpose is to hold the bonds to maturity. Rell purchased the bonds for €11,500,000. As of December 31, 2018, Rell calculates €915,000 of credit losses expected for default events occurring during 2019 and €600,000 of credit losses expected for default events occurring after 2019
Required:1. Assume the Tirish bonds have not had a significant increase in credit risk. Prepare the journal entry to record any impairment loss as of December 31, 2018.
2. Assume the Tirish bonds have had a significant increase in credit risk. Prepare the journal entry to record any impairment loss as of December 31, 2018.
3. Assume the Tirish bonds have not had a significant increase in credit risk, and that as of December 31, 2019, Rell calculates €800,000 of credit losses expected for default events occurring during 2020 and €500,000 of credit losses expected for default events occurring after 2020. Prepare the journal entry Rell would make with respect to any impairment loss as of December 31, 2019.
Rell Corporation reports under IFRS No. 9. Rell has an investment in Tirish, Inc. bonds the...
Rell Corporation reports under IFRS No. 9. Rell has an investment in Tirish, Inc. bonds the Rell accounts for at amortized cost, given that the bonds pay only interest and principal and Rell's business purpose is to hold the bonds to maturity. Rell purchased the bonds for €11,500,000. As of December 31, 2018, Rell calculates €915,000 of credit losses expected for default events occurring during 2019 and €600,000 of credit losses expected for default events occurring after 2019 Required:1. Assume...
Stewart Enterprises has the following investments, all purchased prior to 2018: Bee Company 5% bonds, purchased at face value, with an amortized cost of $4,000,000, and classified as held to maturity. At December 31, 2018, the Bee investment had a fair value of $3,500,000, and Stewart calculated that $240,000 of the fair value decline is a credit loss and $260,000 is a noncredit loss. At December 31, 2019. the Bee investment had a fair value of $3,700,000, and Stewart calculated...
Tanner-UNF Corporation acquired as a long-term investment $240 million of 6% bonds, dated July 1, on July 1, 2018. The market interest rate (yield) was 8% for bonds of similar risk and maturity. Tanner-UNF paid $200 million for the bonds. The company will receive interest semiannually on June 30 and December 31. Company management has classified the bonds as available-for-sale investments. As a result of changing market conditions, the fair value of the bonds at December 31, 2018, was $210...
10:08 AM Thu Feb 20 437% a Aas 1. Bee Company 5% bonds, purchased at face value, with an amortized cost of $4,000,000, and classified as held to maturity. At December 31, 2018, the Bee investment had a fair value of $3,500,000, and Stewart calculated that S240,000 of the fair value decline is a credit loss and $260,000 is a noncredit loss. At December 31, 2019, the Bee investment had a fair value of $3,700,000, and Stewart calculated that $140,000...
S&L Financial buys and sells securities which it classifies as available-for-sale. On December 27, 2018, S&L purchased Coca-Cola bonds at par for $885,000 and sold the bonds on January 3, 2019, for $892,500. At December 31, the bonds had a fair value of $878,000, and S&L has the intent and ability to hold the investment until fair value recovers. Prepare journal entries to record (a) any unrealized gains or losses occurring in 2018 and (b) the sale of the bonds...
Tanner-UNF Corporation acquired as a long-term investment $300 million of 7% bonds, dated July 1, on July 1, 2018. The market interest rate (yield) was 8% for bonds of similar risk and maturity. Tanner-UNF paid $280 million for the bonds. The company will receive interest semiannually on June 30 and December 31. Company management has classified the bonds as available for sale investments. As a result of changing market conditions, the fair value of the bonds at December 31, 2018,...
4 only. TannerUNF Corporation acquired as a long term Investment $240 mallon of 8% bonds, dated July , on July , 2018.. The market interest rate tyeld) was 10% for bonds of smilar risk and maturity Tanner-UNF paid $200 mmon for the bonds. The company wil receive interest semiannuality on June 30 and December 31. Company management is holding the bonds in its trading portolio. As a result of changing market conditions, the fair value of the bonds at December...
Tanner-UNF Corporation acquired as a long-term investment $300 million of 6% bonds , dated July 1, on July 1, 2018. The market interest rate (yield) was 8 % for bonds of similar risk and maturity. Tanner-UNF paid $250 million for the bonds. The company will receive interest semiannually on June 30 and December 31. Company management has classified the bonds as available-for-sale investments. As a result of changing market cond itions, the fair value of the bonds at December 31,...
Tanner-UNF Corporation acquired as a long-term investment $225 million of 8% bonds, dated July 1, on July 1, 2018. The market interest rate (yield) was 10% for bonds of similar risk and maturity. Tanner-UNF paid $180 million for the bonds. The company will receive interest semiannually on June 30 and December 31. Company management has classified the bonds as available-for-sale investments. As a result of changing market conditions, the fair value of the bonds at December 31, 2018, was $190...
Tanner-UNF Corporation acquired as a long-term investment $260 million of 8% bonds, dated July 1, on July 1, 2018. The market interest rate (yield) was 10% for bonds of similar risk and maturity, Tanner-UNF paid $220 million for the bonds. The company will receive interest semiannually on June 30 and December 31. Company management is holding the bonds in its trading portfolio. As a result of changing market conditions, the fair value of the bonds at December 31, 2018, was...