Halberton Corp. purchased 1,000 common shares of Xenolt Ltd., a publicly traded company, for $52,800. During the year Xenolt paid cash dividends of $2.50 per share. At year-end, due to a temporary downturn in the market, the shares had a market value of

$50 per share. Halberton’s business model is to collect the dividend cash flows for now, and sell this investment if/when the share price reaches 54,000. Halberton follows IFRS and has elected to classify this investment as FVOCI equities, with recycling to best fit with their intentions to sell, but at a later date.

Required:

a. How would Halberton report this investment?

b. Prepare Halberton’s journal entries for the investment purchase, the dividend, and any year-end adjusting entries. Is the drop in market price due to an investment impairment?

c. Prepare the sale entry if Halberton sells the investment one week into the next fiscal year for $54,200 cash.

d. How would the answer for part

(a) change if Halberton followed ASPE?