Question 3 [24 points]

On January 1, 2015, JenStar purchased $60,000,000 in 10% bonds that will mature in 5 years. Management intends to have the investment available-for-sale when the circumstances warrant. For bonds of similar risk and maturity, the market yield was 11%. Interest is received semiannually on June 30 and December 31. Due to changing market conditions, the fair value of the bonds at December 31, 2015, was $54,000,000. JenStar follows IFRS. Answer the following questions. Please make sure your final answer(s) are accurate to the nearest whole number. Enter an appropriate description when entering the transactions in the journal. Dates must be entered in the format dd/mmm (ie. January 15 would be 15/Jan). a) Prepare the journal entry to record JenStar's investment on January 1, 2015.

General JournalPage G1DateAccount/ExplanationPRDebitCredit1/Jan

b) Prepare the journal entry by JenStar to record interest on June 30, 2015.

General JournalPage G1DateAccount/ExplanationPRDebitCredit30/Jun

c) Prepare the journal entry by JenStar to record interest on December 31, 2015.

General JournalPage G1DateAccount/ExplanationPRDebitCredit31/Dec

Cash

d) Prepare the adjustment necessary to report JenStar's investment on the December 31, 2015 balance sheet.

General JournalPage G1DateAccount/ExplanationPRDebitCredit31/Dec

e) What amounts will JenStar report for its investment on the December 31, 2015 balance sheet?

Carrying value =

Accumulated other comprehensive income (AOCI) =