Question
On January 1, 20X5, Hillside Inc., which reports its financial statements in accordance with IFRS, bought $3,750,000 of five-year, 8%, Straight Arrow bonds. The bonds
On January 1, 20X5, Hillside Inc., which reports its financial statements in accordance with IFRS, bought $3,750,000 of five-year, 8%, Straight Arrow bonds. The bonds pay interest annually on December 31. When Hillside bought the bonds, the market rate of interest was 7% and the company classified the bond investment as FVOCI upon inception.
Market value information on the bonds:
Date Market value
December 31, 20X5 $3,900,000
December 31, 20X6 3,800,000
December 31, 20X7 3,850,000
December 31, 20X8 3,650,000
December 31, 20X93,750,000
What is the balance in the AOCI account that is associated with these bonds at December 31, 20X6?
** I unlocked this question and was given the answer 50,000 but I have no idea how they got that and I really don't think that is the correct answer. Can you help me out?
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Textbook Of Financial Accounting And Analysis
Authors: Gaurav Agrawal
1st Edition
9350840901, 9789350840900
