Pronghorn Corporation made the following purchases of investments during 2020, the first year in which Pronghorn invested in equity securities:

1.		On January 15, purchased 11,340 shares of Nirmala Corp.s common shares at $42.20 per share plus commission of $2,496.
2.		On April 1, purchased 6,300 shares of Oxana Corp.s common shares at $66 per share plus commission of $4,246.
3.		On September 10, purchased 8,820 shares of WTA Corp.s preferred shares at $33.40 per share plus commission of $3,667.

On May 20, 2020, Pronghorn sold 3,780 of the Nirmala common shares at a market price of $44 per share less brokerage commissions of $3,591. The year-end fair values per share were as follows: Nirmala $38, Oxana $69, and WTA $35. The chief accountant of Pronghorn tells you that Pronghorn Corporation holds these investments with the intention of selling them in order to earn short-term profits from appreciation in their prices and accounts for them using the FV-NI model. Assume that Pronghorn Corporation follows IFRS 9.

Prepare the journal entries to record the three investments.

Prepare the journal entry for the sale of the 3,780 Nirmala shares on May 20.

Prepare the adjusting entry needed on December 31, 2020.

Repeat the parts above, assuming the investments are accounted for using FV-OCI with no recycling. Pronghorns policy is to capitalize transaction costs on the acquisition of FV-OCI investments and reduce the proceeds on disposal. In addition, the company reclassifies any gains or losses on disposition to Retained Earnings.

What is the amount that will be reported as other comprehensive income for the year ended December 31, 2020? Show the wording that would appear on the comprehensive income statement

What will be the balance in Accumulated Other Comprehensive Income on December 31, 2020?

Pronghorn Corporation made the following purchases of investments during 2020, the first year in which Pronghorn invested in equity securities:

1.		On January 15, purchased 11,340 shares of Nirmala Corp.s common shares at $42.20 per share plus commission of $2,496.
2.		On April 1, purchased 6,300 shares of Oxana Corp.s common shares at $66 per share plus commission of $4,246.
3.		On September 10, purchased 8,820 shares of WTA Corp.s preferred shares at $33.40 per share plus commission of $3,667.

On May 20, 2020, Pronghorn sold 3,780 of the Nirmala common shares at a market price of $44 per share less brokerage commissions of $3,591. The year-end fair values per share were as follows: Nirmala $38, Oxana $69, and WTA $35. The chief accountant of Pronghorn tells you that Pronghorn Corporation holds these investments with the intention of selling them in order to earn short-term profits from appreciation in their prices and accounts for them using the FV-NI model. Assume that Pronghorn Corporation follows IFRS 9.

Correct answer iconYour answer is correct.

Prepare the journal entries to record the three investments. (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 amounts.)

Date	Account Titles and Explanation	Debit	Credit
Jan. 15
Apr. 1
Sep. 10

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Prepare the journal entry for the sale of the 3,780 Nirmala shares on May 20. (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 amounts.)

Date	Account Titles and Explanation	Debit	Credit
May 20

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Prepare the adjusting entry needed on December 31, 2020. (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 amounts.)

Date	Account Titles and Explanation	Debit	Credit
Dec. 31

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Repeat the parts above, assuming the investments are accounted for using FV-OCI with no recycling. Pronghorns policy is to capitalize transaction costs on the acquisition of FV-OCI investments and reduce the proceeds on disposal. In addition, the company reclassifies any gains or losses on disposition to Retained Earnings. (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 amounts.)

	Date	Account Titles and Explanation	Debit	Credit
(a)

(b)

		(To adjust to fair value at date of disposal)

		(To record disposal)

		(To reclassify holding gain)
(c)

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What is the amount that will be reported as other comprehensive income for the year ended December 31, 2020? Show the wording that would appear on the comprehensive income statement. (If an amount reduces the account balance then enter with negative sign.)

Other Comprehensive Income

		$

		$

$

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Partially correct answer iconYour answer is partially correct.

What will be the balance in Accumulated Other Comprehensive Income on December 31, 2020? (If an amount reduces the account balance then enter with negative sign.)

Balance of Accumulated Other Comprehensive Income:

		$

:

$

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