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On June 1, 2016, Hansen Company purchased ten $1,000 Francisco Company bonds at par and classified them as held-to-maturity. In 2017, Francisco experienced financial difficulties
On June 1, 2016, Hansen Company purchased ten $1,000 Francisco Company bonds at par and classified them as held-to-maturity. In 2017, Francisco experienced financial difficulties and Hansen reduced the carrying value of each bond by 40%. In 2018, Francisco improved its financial condition, and Hansen believed that each bond was now worth $900 based on current market yields.
Required:
1. | Prepare the journal entries for Hansen to record the above events under U.S. GAAP. |
2. | How would your answers change if the company uses IFRS? |
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