Bremblay Ltd. owns corporate bonds that it accounts for using the amortized cost model. As at December

Question:

Bremblay Ltd. owns corporate bonds that it accounts for using the amortized cost model.

As at December 31, 2020, after an impairment review was triggered, the bonds have the following financial data: image text in transcribed

The company does not use a valuation account.

Required:

a. Prepare all relevant entries related to the impairment assuming the company follows ASPE. Is this reversible?

b. Prepare all relevant entries related to the impairment assuming that the company follows ASPE but uses an asset valuation allowance account.

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Related Book For book-img-for-question

Intermediate Financial Accounting Volume 1

ISBN: 9781539980674

1st Edition

Authors: Glenn Arnold, Suzanne Kyle, Lyryx Learning

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Question Posted: Jul 01, 2024 11:01 AM

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Bremblay Ltd. owns corporate bonds that it accounts for using the amortized cost model. As at December

Question:

Par value Amortized cost Discounted cash flow at the current market rate Discounted cash flows at the original historic rate Bond, net realizable value $500,000 422,000 400,000 390,000 395,000

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Intermediate Financial Accounting Volume 1

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