Repeat E16-8 assuming that Greenburg Company is an IFRS reporter and the company would like to elect to report the investment at fair value through other comprehensive income if it qualifies for this treatment. Greenburg is holding the investment in common stock for trading. Greenburg is not holding the investment in preferred stock for trading, nor is it pan of contingent consideration in a business combination.

Data from E16-8

Greenburg Company reported the following investment activity occurring at January 1 of the current year. Greenburg does not have significant influence over the investees.

Required 

a. Prepare the journal entry required to record the acquisition of the investments at the beginning of the current year.

b. Prepare the journal entries to record interest and dividend income at year-end assuming that Greenburg receives the dividends on the preferred shares.

c. Prepare the journal entries required to adjust the carrying amount of the investments to their fair values at the end of the first year: bonds, $4,595,425; common stock, $38 per share; and preferred stock, $12 per share.

Transcribed Image Text:

Amount Paid Portfolio Description Investment in bonds ($5 600,000 par value, 7% coupon, annual interest pad on December 31, 15 years to matur ty, 9% effective y e d) Investment in pub cty traded common stock (100 000 shares, $33 per share acquisition price) Investmentin pub cy traded prefered stock |(25,000 shares. $10 par $10 000 annual dv dend, $18 per share acquisition price) He d to matur ty $4,697 203 3,300 000 450 000