Financial Instruments

Investment in Dept Securities $-$ Brighton Corporation

On July $1,2016,$ ABC Grocers, Inc. purchased an investment in the $5-$year $10\%($stated rate$)$ debt

securities with a face value of $$400,000$ of Brighton Corporation, a publicly traded company. At the time

of purchase the market interest rate for similar risk debt was $8\%.$ Interest is to be received semi$-$

annully beginning December $31,2016.$ ABC intends to hold the investment to maturity but if the

market interest rate drops significantly the Company would consider selling the investment. Holding the

investment to maturity is not part of ABC's investing strategy or business model. Assume the market

interest rate for similar risk securities is $9\%$ at $12/31/16.$

Required: Record the journal entry for the purchase of the investment on July $1$st$,$ receipt of interest, and record necessary adjusting

journal entries in their own adjusting journal entry workpaper and also in the respective trial balance worksheet for $12/31/16.$

As part of your work, prepare an amortization table. For IFRS, follow IFRS No$.9.$