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if Teal Company, a public company following IFRS purchased $80,000, 6% five-year bonds of IAA Corporation on January 1, 2021 Interest is payable on July
if Teal Company, a public company following IFRS purchased $80,000, 6% five-year bonds of IAA Corporation on January 1, 2021 Interest is payable on July 1 and January 1. The bond is selling at a $83,501 resulting in a bond premium of $3,501. The effective interest rate is 5%. At the year-end of December 31, the fair value of the investment was $82,500. Prepare the appropriate journal entries for the year ending December 31, 2021 assuming that Teal Company uses FV-OCI. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter for the amounts. Round answers to decimal palces, es 5,125) Date Account Titles and Explanation Debit Credit January 1 83501 Cash 83501 (Purchase the bond) July 1 Cash 2400 Interest Income 2087,53 Bond Investment at Amortized Cost 312.48 (Receipt of interest) (Receipt of interest) Interest Receivable December 31 2400 Interest Income 2079.71 Bond Investment at Amortized Cost 320.29 (Accrue interest and amortization (effective interest method) at year end) Unrealized Gain or Loss OCI 368 23 FV-OCH Investments 368.23 (Remeasurement to fair value at year end)
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