Rome Ltd. had the following transactions relating to its investments during 2020. Rome follows IFRS. (5 marks)

On December 31, 2019, Rome Corp. had the following securities in its portfolio of investments accounted for using the FV-OCI model:CostMarket5,000 common shares of Seed Corp. $ 35,000 $ 33,0001,000 common shares of Core Ltd.21,00026,500$56,000 $59,500

Both securities had been purchased in 2019. In 2020, Rome completed the following securities transactions: March 30Sold the shares of Seed for $30,000 Apr1 Bought 300 common shares of Laces Corp. @ $50 each, plus fees of $500.

On December 31, 2020, the market value of these two securities appeared as follows:Market 1,000 common shares of Core Ltd. 30,800 3,000 common shares of Laces Corp14,750$45,550 Instructions Assume that Rome uses the FV-OCI model without recycling for these three investments and that the company has a policy of capitalizing transaction fees. Prepare the general journal entries for: i) sale of the Seed shares ii) purchase of the Laces Corp. shares, ii) any 2020 year-end adjusting entries if necessary.

5.2 On July 1, 2020, Rome acquired a $400,000 (face value), 5%, 6-year government bond with interest paid semi-annually on December 31 and June 30 each year. The market rate of interest was 4% on that date, and the bonds had a fair value of $421,151. As the year end approached and market interest rates increased, the bonds had a fair value of $410,000 on December 31, 2020. Rome intends to hold on to this investment for its entire term and is accounting for it using the cost/amortized cost model. journal entries required relating to this investment for 2020. (4 marks)

5.3 List the three non-strategic investment models and give one advantage for each one (Why might a company choose that particular model?).

5.4 On January 2, 2020, Rome acquired 75,000 shares (25%) of the outstanding shares of Braeburn at a price of $8.75 per share, giving it significant influence over Braeburn.Braeburn had total net income of $160,000 for the year ended December 31, 2020. Braeburn declared and paid dividends of $80,000 to its all shareholders on December 31, 2020. journal entries required relating to this investment for 2020.(5 marks)

Bonus: $30,000 of the purchase cost is an excess over Braeburn's carrying amounts and is attributable to depreciable assets that have a 10 year life. additional journal entries required relating to this investment for 2017 (1 mark)