Ans:
Journal Entries |
(Amount In Millions) |
|||
1&2 |
Event |
Particulars |
Debit($) |
Credit($) |
1 |
Investment in Bonds A/c |
260 |
||
Discount on Bond Investment(Bal) |
40 |
|||
Cash |
220 |
|||
(To record investments in Bonds) |
||||
2 |
Cash A/c ( 4 %* 260) |
10.4 |
||
Discount on Bonds A/c (Bal) |
0.6 |
|||
Interest Revenue ( 5 %* 220) |
11 |
|||
(To record Interest) |
3 |
Part C |
||||
31-Dec |
Fair Value Adjustments |
9.4 |
230-(220+0.6) |
||
Net Unrealised Holding gains and losses |
9.4 |
||||
4 |
Date |
Particulars |
Debit |
Credit |
|
1 |
unrealised Holding Loss |
60 |
(230-170) |
||
Fair Value Adjustment |
60 |
||||
2 |
Fair Value Adjustment |
50.6 |
|||
Reclassification Adjustment |
50.6 |
||||
3 |
Cash A/c |
170 |
|||
Discount on Bond Investment ( 40 - 0.6) |
39.4 |
||||
Loss on sale of Investment (Bal) |
50.6 |
||||
Investment in bonds |
260 |
||||
(To record the sale) |
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