Repeat P16-4 assuming that DcNauh Air craft Corporation is an IFRS reporter and would like to elect to report the investments at fair value through other comprehensive income if it qualifies for Ibis treatment. DeNault is not holding !he investments for trading nor is it part of contingent consideration in a business combination.

Data from P16-4

DeNauh Aircraft Corporation acquired the following equity investments at the beginning of Year 1 to be held in a portfolio. DeNaull does not have significant influence over the investees.

Required

a. Prepare the journal entry to record the acquisition of the investments.

b. Prepare the journal entry to record the end of Year 1 fair value adjustment for the portfolio.

c. Assume that DeNault sells 35,000 Yan-Co shares for $23 per share at the beginning of Year 2. Prepare the journal entry required to record the sale. DeNault does not adjust the fair value adjustment account at this time.

d. Prepare the journal entry to record the Year 2 fair value adjustment.

Transcribed Image Text:

Revere Group Belton Brothers Yan Co Associates Lopes Company Description Number of shares Market pr ce per share Share acquisit on price Share prices al the end of Years 1 and 2 follow 100 100 98 000 45,000 69,500 x $16 x $23 x $1t x $68 $2,302.300 $1,078,000 $720,000 $4.726,000 Yan-Co Associates Revere Group Belton Brothers Fair Value End of Year 1 End a Year 2 Lopes Company $21 $59 $51 $26 $9 $25 $18