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Martinez Corporation made the following purchases of investments during 2020, the first year in which Martinez invested in equity securities: On January 15, purchased 10,710 shares of Nirmala Corp.'s common shares at $39.90 per share plus commission of 1. $2,355. 2. On April 1, purchased 5,950 shares of Oxana Corp's common shares at $62 per share plus commission of $4,010. 3. On September 10, purchased 8,330 shares of WTA Corp.'s preferred shares at $31.50 per share plus commission of $3,463. On May 20, 2020, Martinez sold 3,570 of the Nirmala common shares at a market price of $42 per share less brokerage commissions of $3,392. The year-end fair values per share were as follows: Nirmala $36, Oxana $65, and WTA $33. The chief accountant of Martinez tells you that Martinez Corporation holds these investments with the intention of selling them in order to earn short-term profits from appreciation in their prices and accounts for them using the FV-NI model. Assume that Martinez Corporation follows IFRS 9.Prepare the journal entries to record the three investments. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 15 FV-NI Investments Investment Income or Loss Cash Apr. 1 FV-NI Investments Investment Income or Loss Cash Sep. 10 FV-NI Investments Investment Income or Loss CashPrepare the journal entry for the sale of the 3,570 Nirmala shares on May 20. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Debit Credit May 20 Cash FV-NI Investments Investment Income or LossPrepare the adjusting entry needed on December 31, 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Dec. 31 FV-NI Investments Investment Income or LossRepeat the parts above. assuming the investments are accounted for using FV-OCI with no recycling. Martinez's policy is to capitalize transaction costs on the acquisition of FV-DCI investments and reduce the proceeds on disposal. In addition, the company.r reclassies any gains or losses on disposition to Retained Earnings. (Credit account titles areautnmamy Indented when the amount is entered. Do not lndentmanuap If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts} Date Amount Titles and Explanation Debit audit [2] FV-OCllnvestments c... 1 1 Apnl v FV-OCllnvestments c... 1 1 FV-OCI Investments 5... 1 1 lb} FV-OCllnvestments Unrealized Gain or Loss - OCI l I (To adjust to fair value at date of disposal) May 20 V c... 1 1 FV-OCI Investments (To record disposal] May 20 Unrealized Gain or Loss - OCI Retained Earnings (To reclassify holding gain) c) Dec. 31 Unrealized Gain or Loss - OCI FV-OCI InvestmentsWhat is the amount that will be reported as other comprehensive income for the year ended December 31, 2020? Show the wording that would appear on the comprehensive income statement. (If an amount reduces the account balance then enter with negative sign.) Other Comprehensive Income Items that may not be reclassified subsequently to net income v Holding losses arising during the year Year end fair value adjustment for portfolio v Fair value adjustment May 20 On Nirmala Corp. shares sold TotalWhat will be the balance in Accumulated Other Comprehensive Income on December 31, 2020? (If an amount reduces the account balance then enter with negative sign.) Balance of Accumulated Other Comprehensive Income: Beginning balance Other comprehensive income for 2020 v Less Reclassification adjustment Ending balance December 31, 2020 $
