6 Tom Lam (TL) IFRS. During 2018, TJL purchased nequestWarren Corp) and continued to hold as of December 31, 2010. TJL elected to use the option FRS 90 FVOC option for equity). Information regarding this investment follows: Warren Carp 400 common shares Before considering commission, the purchase price was 2019 was 517.00 per share. Warren Corp. is a public company with millions of shares outstanding and its stock trades regularly on the stock exchange TIL Rediger currently records these investments at historical cost, before making any year-end adjusting journal entries. TJL' fiscal year ends on December 31 The following transactions occurred in 2020 1. March 15 - Sold 150 Warren common shares at $22 per share. Commission paid on the sale was $400. 2. July 1 - Purchased a 5-year bond investment in Royal Bank. The bond has a face value of $200,000, matures on June 30, 2025, and bears coupon interest at 4% per annum, payable semi-annually each June 30 and December 31. The market rate of interest is 6% per annum TUL will account for this bond investment using the FVOCI method. 3. December 31 - Cash received from Royal Bank for the semi-annual coupon on the bond. Af December 31, 2020, the fair values of the investments were as follows: Warren common shares = $14 per share Royal Bank bond = $198,000 REQUIRED (A) Prepare the adjusting journal entry(s), if any, that TJL should make on December 31, 2019 in regards to the investment in Warren. If no adjusting journal entry(s) is required, briefly explain why. (B) IfTJL did not choose to account for its investment in Warren using the OCI option under IFRS 9, explain how TIL should account for its investment in Warren, (C) Ignore your answer to part (B). Prepare all required journal entries, including year-end adjusting Journal entries, for 2020. (D) Assume that on January 1 of 2021, TJL sells all of the Royal Bank bonds for $197,344. Prepare the applicable journal entry or entries to reflect this sale. Show supporting work all calculations to allow the marker to award part Marks. 6 Tom Lam (TL) IFRS. During 2018, TJL purchased nequestWarren Corp) and continued to hold as of December 31, 2010. TJL elected to use the option FRS 90 FVOC option for equity). Information regarding this investment follows: Warren Carp 400 common shares Before considering commission, the purchase price was 2019 was 517.00 per share. Warren Corp. is a public company with millions of shares outstanding and its stock trades regularly on the stock exchange TIL Rediger currently records these investments at historical cost, before making any year-end adjusting journal entries. TJL' fiscal year ends on December 31 The following transactions occurred in 2020 1. March 15 - Sold 150 Warren common shares at $22 per share. Commission paid on the sale was $400. 2. July 1 - Purchased a 5-year bond investment in Royal Bank. The bond has a face value of $200,000, matures on June 30, 2025, and bears coupon interest at 4% per annum, payable semi-annually each June 30 and December 31. The market rate of interest is 6% per annum TUL will account for this bond investment using the FVOCI method. 3. December 31 - Cash received from Royal Bank for the semi-annual coupon on the bond. Af December 31, 2020, the fair values of the investments were as follows: Warren common shares = $14 per share Royal Bank bond = $198,000 REQUIRED (A) Prepare the adjusting journal entry(s), if any, that TJL should make on December 31, 2019 in regards to the investment in Warren. If no adjusting journal entry(s) is required, briefly explain why. (B) IfTJL did not choose to account for its investment in Warren using the OCI option under IFRS 9, explain how TIL should account for its investment in Warren, (C) Ignore your answer to part (B). Prepare all required journal entries, including year-end adjusting Journal entries, for 2020. (D) Assume that on January 1 of 2021, TJL sells all of the Royal Bank bonds for $197,344. Prepare the applicable journal entry or entries to reflect this sale. Show supporting work all calculations to allow the marker to award part Marks