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Octavio Corp. prepares financial statements annually on December 3 1 , its fiscal year end. The company follows IFRS. At December 3 1 , 2

Octavio Corp. prepares financial statements annually on December 31, its fiscal year end. The company follows IFRS. At December 31,2023, the company has the account Investments in its general ledger, containing the following debits for investment purchases, and no credits:
Feb.1,2023
Chiang Corp. common shares, no par value, 200 shares
$37,400
Apr. 1
Government of Canada bonds, 6%, due April 1,2033, interest payable April 1 and October 1,100 bonds of $1,000 par value each
100,000
July 1
Monet Corp. 12% bonds, par $50,000, dated March 1,2023, purchased at 108 plus accrued interest to yield 11%, interest payable annually on March 1, due on March 1,2040
56,000
Nov. 1
$60,000, six-month noninterest-bearing note that matures on May 1,2024, bought to yield 10%
57,143
The fair values of the individual securities on December 31,2023, were:
Chiang Corp. common shares (active stock market price)
$ 33,800
Government of Canada bonds
105,900
Monet Corp. bonds
55,600
Note receivable
58,350
The Government of Canada bonds were being managed for their yield to maturity and are being held to maturity, and the Monet bonds were acquired with the hope of gaining from falling interest rates. The Chiang shares were acquired with the hope of ensuring the supply of raw materials from this company in the future when more shares will be purchased.
Instructions
(Round amounts to the nearest dollar.)
Which measurement model should Octavio use for each investment? (Hint: Use the decision tree in Illustration 9.12 to help analyze this situation. At each decision point in the decision tree, analyze the next step.)
Prepare the entries necessary to correct any errors in the Investments account.
Prepare the entries required to record any accrued interest, amortization of any premium or discount, and recognition of fair values on December 31,2023.
During 2024, the following transactions took place:
The note was sold on February 1,2024, for $59,600.
The Government of Canada bonds were sold on July 1,2024, for $109,200 plus accrued interest. Prepare entries to record these transactions.
Assume that the note was not sold on February 1,2024, but instead was held until it matured. Provide the proper entry to record the disposal of the note at maturity.
Assume that Octavio Corp. is a private entity and applies ASPE. Identify which, if any, of your answers to parts (a) to (e) would change under this assumption. Explain briefly.

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