1 The following are transactions of Prosperous Berhad, which were completed during the fiscal year. (a) Prosperous Berhad purchased 2,000 securities of Rich Company at the price of RM5 each with the prospect of selling them in the future when their value appreciate. The brokerage fee for this purchase is RM1,350. (b) Prosperous Berhad purchased RM100,000 of the government's 5% bond, paying at a price of 103.50%. Prosperous Berhad also paid RM1,700 for the brokerage fees. Prosperous Berhad sold half of the shares of Rich Company that it previously bought at a price of RM7 per share. Required: (a) Explain how Prosperous Berhad would classify its investments in Rich Company in accordance with the provisions in MFRS 9 if the securities in Rich Company is classified as a Fair Value through Profit or Loss (FVPL) and if the bond is classified as an Amortized Cost (AC). (b) Prepare the journal entries for the transactions in accordance with the current applicable accounting standards for financial instruments. (Special Note: Bond prices are usually quoted in %. If the bond price is more than the face value, then the bond is issued at a premium. In contrast, if the bond price is lower than the face value, then the bond is issued at a discount. If the bond price is equal to the face value, then the bond is issued at par.) 1 The following are transactions of Prosperous Berhad, which were completed during the fiscal year. (a) Prosperous Berhad purchased 2,000 securities of Rich Company at the price of RM5 each with the prospect of selling them in the future when their value appreciate. The brokerage fee for this purchase is RM1,350. (b) Prosperous Berhad purchased RM100,000 of the government's 5% bond, paying at a price of 103.50%. Prosperous Berhad also paid RM1,700 for the brokerage fees. Prosperous Berhad sold half of the shares of Rich Company that it previously bought at a price of RM7 per share. Required: (a) Explain how Prosperous Berhad would classify its investments in Rich Company in accordance with the provisions in MFRS 9 if the securities in Rich Company is classified as a Fair Value through Profit or Loss (FVPL) and if the bond is classified as an Amortized Cost (AC). (b) Prepare the journal entries for the transactions in accordance with the current applicable accounting standards for financial instruments. (Special Note: Bond prices are usually quoted in %. If the bond price is more than the face value, then the bond is issued at a premium. In contrast, if the bond price is lower than the face value, then the bond is issued at a discount. If the bond price is equal to the face value, then the bond is issued at par.)