Question 2 Ding Ding Company has the following investments in its portfolio on the year-end date 31 December 2018: 10% bonds mature on 1 January 2023 (Notel) 20,000 ordinary shares of Triple Corporation (Note 2) 15,000 ordinary shares of Tangible Corporation (Note 3) Cost/Carrying Fait amount (5) Value (5) 937,902 950,000 80.000 80.000 120.000 100.000 Note 1 On 1 January 2018, Ding Ding Company purchased 10% bonds, having a maturity value of $1,000,000, for $926,399. The maturity date is 1 January 2024. The bonds provide the bondholders with a 12% yield, with interest receivable on 1 January and I July of cach year (starting from 1 July 2018). Ding Ding intends to hold these bonds to collect contractual cash flows and not for trading On 31 December 2019, the fair value of the bonds is $980,000. Note 2 In mid-June, the company sold all the shares of Triple Corporation for 596,000. The commission and fees related to the transaction were $2,500. Note 3 Due to the high dividend policy, the equity investment in Tangible Corporation was treated as not for trading. On 30 June and 31 December 2019, Tangible Corporation paid $3 and 5 dividends per share respectively. Additional Information On 1 January 2019, Ding Ding acquired a 30% interest in Teawood Company for $500,000. At the date of purchase, the book value of net assets of Teawood was S1,200,000. The book values and fair values for all statement of financial position items were the same except for the plant facilities. The estimated useful life of the plant facilities is 10 years. During 2019. Teawood's reported net income was $150,000 and the company also paid cash dividends for S90,000. Question 2 (continued) The fair value of the investments on 31 December 2019 are shown as below: 12% bonds, mature at 1 January 2023 Ordinary shares of Tangible Corporation Ordinary shares of Teawood Company Fair Value (S) 940,000 150,000 560,000 Required: (a) Prepare all relevant journal entries to record the investments for the financial year of 2019. (27 marks) (b) Prepare the extracted statement of financial position showing the relevant accounts regarding the above investments as at 31 December 2019. (8 marks)