Exercise 9-11 Bramble Corporation made the following purchases of investments during 2017, the first year in which Bramble invested in equity securities: 1. On January 15, purchased 8,640 shares of Nirmala Corp.s common shares at $32.16 per share plus commission of $1,901 2. On April 1, purchased 4,800 shares of Oxana Corp.'s common shares at $50 per share plus commission of $3,235. 3. On September 10, purchased 6,720 shares of WTA Corp.s preferred shares at $25.44 per share plus commission of $2,794 On May 20, 2017, Bramble sold 2,880 of the Nirmala common shares at a market price of $34 per share less brokerage commissions of $2,736. The year-end fair values per share were as follows: Nirmala $29; Oxana $53; and WTA $27. The chief accountant of Bramble tells you that Bramble 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, with no separate reporting of dividends and other types of FV-NI investment income and losses. Assume that Bramble 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. Round answers to 0 decimal places, e.g. 5,275.) Date Account Titles and Explanation Debit Credit Jan. 15 Apr. 1 Sep. 10 Prepare the journal entry for the sale of the 2,880 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 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275.) Date Account Titles and Explanation May 20 Debit Credit Prepare the adjusting entry needed on December 31, 2017. (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. Round answers to 0 decimal places, e.g. 5,275.) Date Account Titles and Explanation Debit Credit Dec. 31 Repeat the parts above, assuming the investents are accounted for using FV-OCI with no recycling. Bramble's policy is to capitalize transaction costs on the acquisition of FV-OCI investments and reduce the proceeds on disposal. (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. Round answers to 0 decimal places, e.g. 5,275.) Date Account Titles and Explanation Debit Credit To bring the investment to its fair value) (To records the proceeds on disposal) To transfer the holding gain for reclassification)
