Question
On January 1, 2019, Ganges Marine Supplies purchased a government of Canada bond at par for $5,000. The bond has an interest rate of 4%
On January 1, 2019, Ganges Marine Supplies purchased a government of Canada bond at par for $5,000. The bond has an interest rate of 4% and matures in three years. By December 31, 2019, market interest rates had increased such that fair value of the bond decreased to $4,900. The fair value of the bond decreased further to $4,700 on December 31, 2020 (two years after the purchase).
Assume this investment is classified amortized cost:
- At what value should Ganges report the bonds on its December 31, 2019, balance sheet?
- How much income or loss should Ganges report in relation to this bond?
- How much OCI should Ganges report in relation to this bond?
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Routledge Handbook Of Environmental Accounting
Authors: Jan Bebbington, Carlos Larrinaga, Brendan O'Dwyer, Ian Thomson
1st Edition
0367724901, 9780367724900
