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Prepare the entries and year end entries from December 31, 2023, through to the collection of interest on December 31. Also, Following the three-step approach,
Prepare the entries and year end entries from December 31, 2023, through to the collection of interest on December 31.
Also, Following the three-step approach, prepare the journal entries for the sale of the bond on December 31, 2024. Include the reclassification of unrealized gains and losses to net income.
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On July 1, 2023, Bramble Aggregates Ltd. purchased 6\% bonds with a maturity value of $160,000 for $165,737. The bonds provide the bondholders with a 5% yield. The bonds mature four years later, on July 1, 2027, with interest receivable June 30 and December 31 of each year. Bramble uses the effective interest method to allocate unamortized discount or premium. The bonds are accounted for using the FVOCI model with recycling. Bramble has a calendar year end. The fair value of the bonds at December 31, 2023 and 2024 , was $165,303 and $163,618, respectively. Assume fair value adjustments are recorded at year end only. Immediately after collecting interest on December 31, 2024, the bonds were sold for $163,618. List of Accounts Accumulated Other Comprehensive Income Allowance for Investment Impairment Bond Investment at Amortized Cost Cash Commission Expense Dividends Receivable Dividend Revenue FV-NI Investments FV-OCI Investments Gain on Disposal of Investments - FV-NI Gain on Disposal of Investments - FV-OCI Gain on Sale of Investments GST Receivable Interest Expense Interest Income Interest Payable Interest Receivable Investment in Associate Investment Income or Loss Prepare the entries and year-end entries from December 31, 2023, through to the collection of interest on December 31, 2024. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amour Loss on Discontinued Operations Loss on Disposal of Investments FV-NI Loss on Disposal of Investments FV-OCI Loss on Impairment Loss on Sale of Investments No Entry Note Investment at Amortized Cost Other Investments Recovery of Loss from Impairment Retained Earnings Unrealized Gain or Loss Unrealized Gain or Loss - OCIStep by Step Solution
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