Blue Spruce Corporation made the following purchases of investments during 2020, the first year in which Blue Spruce invested in equity securities: 1. On January 15, purchased 10,350 shares of Nirmala Corp.'s common shares at $38.50 per share plus commission of $2,277. 2. On April 1, purchased 5,750 shares of Oxana Corps common shares at $60 per share plus commission of $3,876. On September 10, purchased 8,050 shares of WTA Corp.s preferred shares at $30.50 per share plus commission of $3,347. 3. On May 20, 2020, Blue Spruce sold 3,450 of the Nirmala common shares at a market price of $40 per share less brokerage commissions of $3,278. The year-end fair values per share were as follows: Nirmala $35, Oxana $63, and WTA $32. The chief accountant of Blue Spruce tells you that Blue Spruce Corporation holds these investments with the intention of selling them in order to earn short-term profits from appreciation in their prices and accounts for them using the FV-NI model. Assume that Blue Spruce Corporation follows IFRS 9. Prepare the journal entries to record the three investments. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 15 FV-NI Investments 398786 Investment Income or Loss 2277 Cash 401063 Apr. 1 FV-NI Investments 345000 Investment Income or Loss 3876 Cash 348876 Sep. 10 FV-Nl Investments 245364 Investment Income or Loss 3347 Cash 248711 e Textbook and Media List of Accounts Prepare the journal entry for the sale of the 3,450 Nirmala shares on May 20. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter Ofor the amounts.) Date Account Titles and Explanation Debit Credit May 20 Cash 134722 FV-NI Investments 132825 Gain on Disposal of Investments - FV-NI 1897 e Textbook and Media List of Accounts Prepare the adjusting entry needed on December 31, 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) Date Account Titles and Explanation Debit Credit Dec. 31 FV-NI Investments 5175 Investment Income or Loss 5175 e Textbook and Media List of Accounts Repeat the parts above, assuming the investments are accounted for using FV-OCI with no recycling. Blue Spruce's policy is to capitalize transaction costs on the acquisition of FV-OCl investments and reduce the proceeds on disposal. In addition, the company reclassifies any gains or losses on disposition to Retained Earnings. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) Date Account Titles and Explanation Debit Credit (a) Jan. 15 FV-OCl Investments 401063 Cash Apr. 1 FV-OCI Investments 348876 Cash 3
