PROBLEM #1 (Recommended Time Allocation: 45 Minutes: 23 Marks) Torin Jenelle Limited (TJL") uses IFRS. During 2019, TJL purchased one equity investment (Warren Corp) and continued to hold it as of December 31, 2019. TJL elected to use the OCI option under IFRS 9 (ie FVOCI option for equity). Information regarding this investment follows Warren Corp. 400 common shares. Before considering commission, the purchase price was $14.00 per share Commission paid on the purchase was $400. The fair value at December 31 2019 was $17.00 per share Warren Corp. is a public company with millions of shares outstanding and its stock trades regularly on the stock exchange. TUL's ledger currently records these investments at historical cost before making any year-end adjusting journal entries. TJL's 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 TJL 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. At 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 TIL 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) TTJL did not choose to account for its investment in Warren using the Ol option under IFRS 9 explain how TIL should account for its investment in Warten (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 TIL sells all of the Royal Bank bonds for S197 344 Prepare the applicable journal entry or entries to reflect this sale Show supporting work for all calculations to allow the marker to award part Marks . Question 1 (23 points) PROBLEM #1 (Recommended Time Allocation: 45 Minutes, 23 Marks) Torin Jenelle Limited ("TJL") uses IFRS During 2019. TJL purchased one equity investment (Warren Corp.) and continued to hold it as of December 31, 2019. TJL elected to use the OI option under IFRS 9 (ie FVOCI option for equity). Information regarding this investment follows: Warren Corp. 400 common shares Before considering commission, the purchase price was $14.00 per share Commission paid on the purchase was $400 The fair value at December 31, 2019 was $17.00 per share. Warren Corp. is a public company with millions of shares outstanding and its stock trades regularly on the stock exchange. TJL's ledger currently records these investments at historical cost, before making any year-end adjusting journal entries. TJL's 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. TIL 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. At December 31 2020 the fair values of the investments were as follows Warren common shares = $14 per share Royal Bank bond = $198.000 REQUIRED TA 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) If TJL did not choose to account for its investment in Warren using the OCI option under IFRS 9, explain how TJL 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 for all calculations to allow the marker to award part Marks. Format BI U S .. DESCRIPTION DEBIT CREDIT