FINANCIAL INSTRUMENTS

A company was formed on January 1, 20x4. An analysis of the Investments account as at December 31, 20x5 is as follows:

Dec 31, 20x4 Opening balance $1,653,982

Feb 15, 20x5 Purchase Shurman Inc. shares - classified as FVTOCI; net of $4,500 of brokerage fees 360,000

Mar 30, 20x5 Sold Bailey Inc. shares; net of $3,600 of brokerage fees (335,000)

Sep 10, 20x5 Sold Alemari Corp shares; net of $900 of brokerage fees (125,000)

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Dec 31, 20x5 Ending balance $1,553,982

The opening balance was made up of the following investments:

Jacob Inc. shares (FVTOCI) - original cost = $200,000 $280,000

Bailey Inc. shares (FVTOCI) - original cost = $350,000 310,000

Ventura Inc. shares (FVTOCI) - original cost = $190,000 220,000

Pacebo Inc. shares (FVTPL) - original cost = $150,000 110,000

Alemari Corp. shares (FVTPL) - original cost = $80,000 95,000

Mullin Corp. bonds (Amortized Cost) 208,982

Peric Corp. bonds (FVTOCI) 430,000

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$1,653,982

The Mullin Corporation bonds were purchased on June 30, 20x4 for $209,786. The bonds mature on December 31, 20x9, have a face value of $200,000 and a coupon rate of 5%. The coupon payments are made on June 30 and December 31 of every year. The coupon payments received in 20x5 were credited to revenue.

The Peric Corporation bonds were purchased on January 2, 20x4 for $403,052. The bonds mature on December 31, 20x7, have a face value of $500,000 and a coupon rate of 2 4%. The coupon payments are made on June 30 and December 31 of every year. The coupon payments received in 20x5 were credited to revenue.

Fair values at December 31, 20x5 are as follows:

Jacob Inc. $265,000

Ventura Inc. 215,000

Placebo Inc. 135,000

Mullin Corp. 215,500

Peric Corp. 395,000

Shurman Inc. 210,000

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$1,435,500

The unadjusted trial balance as at December 31, 20x5 shows a credit balance of $76,135 in the A*OCI-Revaluation Gain on FVTOCI Investments account.

Required

- The CFO would like to create separate accounts for FVTPL, FVTOCI and Amortized Cost Investments, i.e. three accounts instead of one. Prepare the necessary adjusting journal entries at December 31, 20x5 relating to the company's investments. In addition, calculate the adjusted ending balance in the A*OCI-Revaluation Gain on FVTOCI Investments account as at Dec. 31, 20x5.