1. An entity purchased $5,000,000 of 8%, 6-year bonds on January 1, 2016, with interest payable on June 30 and December 31. The bonds were purchased for $5,100,000 plus transaction cost of $108,000 at an effective interest rate of 7%. The business model for this investment is to collect contractual cash flows and sell the bonds in the open market. On December 31, 2016, the bond was quoted at 106.

What amount of interest income should be reported for 2016?

What is the adjusted carrying amount of the investment on December 31, 2016?

What amount should be recognized in OCI in the statement of comprehensive income for 2016?

If the entity elected the fair value option, what total amount of income should be recognized for 2016?

If the entity elected the fair value option, what total amount of OCI should be recognized for 2016?

2. On January 1, 2016, Tag Company purchased equity securities designated as financial assets measured at fair value through other comprehensive income. The cost and fair value were:

	Cost	Fair value 12/31/16	Fair value 12/31/17
Sibilis Co shares	$3,000,0000	$3,200,000
Saka Co shares	4,000,000	3,500,000	3,700,000
Kozy Co shares	5,000,000	4,600,000	4,700,000

On January 31, 2017, Tag Company sold the Sibilis Co shares for $3,500,000.

What amount of unrealized gain or loss on the remaining financial assets should be reported in the 2017 statement of comprehensive income as a component of other comprehensive income?

What amount of unrealized gain or loss on the remaining financial asset should be reported in the 2017 statement of financial position as other comprehensive income?