PARI A $-$ FV$-$NI and FV$-$OCI $($Debt investment with recycling$)$:

NZ Travel Inc. purchased the following investments for cash during the vear. NZ Travel Inc. applies IFRS.

$[10$ marks$]$

$[10$ marks$]$

PART A $-$ REQUIRED

Prepare the journal entries required to record the following:

$[1]$ Purchase of the investments during $2023.$

$[2]$ Prepare the entry to record the accrued interest on December $31,2023.$

$[3]$ Prepare any necessary revaluation journal entries.

The fair values of the investments on December $31,2023,$ were:

Common shares $-$ Boat Tours Corp.

Corporate bonds

$(5\%$ of total shares$)$

$98,000$

FV$-$NI

$210,000$

$230,000$

$[4]$ The government bonds were sold on April $1,2024$ for $q,230,000$

This investment is accounted for with the FV$-$OCI model for debt with recycling

$26$

$27$

$28$

$29$ PART B $-$ Significant Influence $-$ Equity Method:

$30$ NZ Travel inc saw an opportunity to invest in another company to support

$31$ their business objective to expand into other countries.

$32$ They purchased enough common shares of Tripping Ltd$.$ to have a significant

$33$ influence in this company.

$34$ PART B $-$ REQUIRED

$[5$ marks$]$

$[$S$]$ Prepare the $2024$ entries for the investment in Tripping Ltd$.$ common shares.

Significant influence $-$ Equity Method

$28/$Feb$/24$ Purchase $100$ Common shares $-$ Tripping Ltd$.$

$70,000$ cash

The common shares purchased represent the following percentage

of total common shares issued by Tripping Ltd$.$

$40\%$

$31/$Oct$/24$ Tripping Ltd$.$ declared and paid total dividends

$30,000$

$31/$Oct$/24$ Tripping Ltd$,$ reported total net income for the year

$90,000$

$31/$Oct$/24$ Tripping Ltd$.$ shares were trading on TSX for

D$.2b$

New.