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send proper answers for this question 34. Manitoba Insurance Ltd. (MIL) purchased SIO million Of bonds on January l, Year l. The bonds were to
send proper answers for this question
34. Manitoba Insurance Ltd. (MIL) purchased SIO million Of bonds on January l, Year l. The bonds were to mature at the end of Year 2 and pay interest equal to 5 percent Of their face value at the end Of each year they are outstanding. MICs operations pass IFRS 9's business model test for the FVOCI category. Therefore, MIL categorized the bonds as FVOCI at the time Of purchase. MIL received the first interest payment on schedule December 31. Year l. As Of that date. the bonds' fair value had risen to Sl I million due to an economywide drop in interest rates. MIL sold the bonds for $11 million the following day, on January l. Year 2. Required: Prepare the journal entries required under IFRS for MIL'S investment in the 5 percent bonds. For simplicity. assume that MIL closes its books annually on December 31, Also, prepare an alternative set of journal entries assuming that MIL had catego- rized the bonds as FVPL instead Of FVOCI. Comment on how the investment in the S bonds affected MIL's pretax income in Years I and 2, as well as how income would have differed had MIL classified the bonds as FVPL
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