undefined

Exercise 9-19 Blue Spruce Corporation owns corporate bonds at December 31, 2020, accounted for using the amortized cost model. These bonds have a par value of $600,000 and an amortized cost of $599,000. After an Impairment review was triggered, Blue Spruce determined that the discounted Impaired cash flows are $560,500 using the current market rate of Interest, but are $558,000 using the market rate when the bonds were first acquired. The company follows a policy of directly reducing the carrying amount of any impaired assets. For simplicity purposes, assume that no impairment loss had been recorded earlier. Assuming Blue Spruce Corporation is a private enterprise that applies ASPE, prepare the journal entry related to the impairment at 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 o for the amounts.) Date Account Titles and Explanation Debit Credit Dec. 31, 2020 List of Accounts Assuming Blue Spruce Corporation is a private enterprise that applies ASPE, prepare the journal entry related to a December 31, 2021 fair value of $578,000 and an adjusted carrying amount at that date of $563,500. (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 o for the amounts.) Date Account Titles and Explanation Debit Credit Dec 31, 2021 Exercise 9-19 Assuming that Blue Spruce Corporation applies IFRS and that there has been a significant increase in credit risk, prepare the journal entry related to the impairment at 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 o for the amounts.) Date Account Titles and Explanation Debit Credit Dec. 31, 2020 SHOW LIST OF ACCOUNTS LINK TO TEXT Assuming Blue Spruce Corporation applies IFRS and that there has been a significant increase in credit risk, prepare the journal entry related to a December 31, 2021 fair value of $578,000 and an adjusted carrying amount of that date of $563,500. Assume that the discounted cash flow numbers provided reflect the lifetime expected risk of default. (Credit account titles are automatically indented when the amount is er tered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Date Account Titles and Explanation Debit Credit Dec. 31, 2021 Accumulated Other Comprehensive Income Allowance for Investment Impairment Bond Investment at Amortized Cost Cash Dividends Receivable Dividend Revenue FV-NI Investments FV-OCI Investments Gain on Disposal of Investments in Associate Gain on Disposal of Investments - Cost/Amortized Cost Gain on Disposal of Investments - FV-NI Gain on Disposal of Investments - FV-OCI Gain or Loss in Value of Investment Property GST Receivable Interest Expense Interest Income . Interest Payable Interest Receivable Investment in Associate Investment Income or Loss Loss on Discontinued Operations Loss on Disposal of Investments - Cost/Amortized Cost Loss on Disposal of Investments - FV-NI Loss on Disposal of Investments - FV-OCI Loss on Impairment No Entry Note Investment at Amortized Cost Other Investments Recovery of Loss from Impairment Retained Earnings Unrealized Gain or Loss Unrealized Gain or Loss - OCI SHOW LIST OF ACCOUNTS LINK TO TEXT Assume that Blue Spruce is a private enterprise under that applies ASPE and that the company uses a valuation allowance instead of directly reducing the carrying amount of the investment. Prepare the entry required for the impairment. (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 o for the amounts.) Debit Credit Date Account Titles and Explanation Dec. 31, 2020 Assume that Blue Spruce is a private enterprise that applies ASPE, and that the company uses a valuation allowance instead of directly reducing the carrying amount of the investment. Prepare the entry required for the subsequent increase in fair value related to December 31, 2021, assuming fair value of $578,000 and an adjusted carrying amount at that date of $563,500. (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 o for the amounts.) Date Account Titles and Explanation Debit Credit Dec. 31, 2021 SHOW LIST OF ACCOUNTS LINK TO TEXT In practice, which method would recognize losses earlier-the incurred loss model or the expected loss model? The would recognize losses earlier. Exercise 9-19 Blue Spruce Corporation owns corporate bonds at December 31, 2020, accounted for using the amortized cost model. These bonds have a par value of $600,000 and an amortized cost of $599,000. After an Impairment review was triggered, Blue Spruce determined that the discounted Impaired cash flows are $560,500 using the current market rate of Interest, but are $558,000 using the market rate when the bonds were first acquired. The company follows a policy of directly reducing the carrying amount of any impaired assets. For simplicity purposes, assume that no impairment loss had been recorded earlier. Assuming Blue Spruce Corporation is a private enterprise that applies ASPE, prepare the journal entry related to the impairment at 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 o for the amounts.) Date Account Titles and Explanation Debit Credit Dec. 31, 2020 List of Accounts Assuming Blue Spruce Corporation is a private enterprise that applies ASPE, prepare the journal entry related to a December 31, 2021 fair value of $578,000 and an adjusted carrying amount at that date of $563,500. (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 o for the amounts.) Date Account Titles and Explanation Debit Credit Dec 31, 2021 Exercise 9-19 Assuming that Blue Spruce Corporation applies IFRS and that there has been a significant increase in credit risk, prepare the journal entry related to the impairment at 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 o for the amounts.) Date Account Titles and Explanation Debit Credit Dec. 31, 2020 SHOW LIST OF ACCOUNTS LINK TO TEXT Assuming Blue Spruce Corporation applies IFRS and that there has been a significant increase in credit risk, prepare the journal entry related to a December 31, 2021 fair value of $578,000 and an adjusted carrying amount of that date of $563,500. Assume that the discounted cash flow numbers provided reflect the lifetime expected risk of default. (Credit account titles are automatically indented when the amount is er tered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Date Account Titles and Explanation Debit Credit Dec. 31, 2021 Accumulated Other Comprehensive Income Allowance for Investment Impairment Bond Investment at Amortized Cost Cash Dividends Receivable Dividend Revenue FV-NI Investments FV-OCI Investments Gain on Disposal of Investments in Associate Gain on Disposal of Investments - Cost/Amortized Cost Gain on Disposal of Investments - FV-NI Gain on Disposal of Investments - FV-OCI Gain or Loss in Value of Investment Property GST Receivable Interest Expense Interest Income . Interest Payable Interest Receivable Investment in Associate Investment Income or Loss Loss on Discontinued Operations Loss on Disposal of Investments - Cost/Amortized Cost Loss on Disposal of Investments - FV-NI Loss on Disposal of Investments - FV-OCI Loss on Impairment No Entry Note Investment at Amortized Cost Other Investments Recovery of Loss from Impairment Retained Earnings Unrealized Gain or Loss Unrealized Gain or Loss - OCI SHOW LIST OF ACCOUNTS LINK TO TEXT Assume that Blue Spruce is a private enterprise under that applies ASPE and that the company uses a valuation allowance instead of directly reducing the carrying amount of the investment. Prepare the entry required for the impairment. (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 o for the amounts.) Debit Credit Date Account Titles and Explanation Dec. 31, 2020 Assume that Blue Spruce is a private enterprise that applies ASPE, and that the company uses a valuation allowance instead of directly reducing the carrying amount of the investment. Prepare the entry required for the subsequent increase in fair value related to December 31, 2021, assuming fair value of $578,000 and an adjusted carrying amount at that date of $563,500. (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 o for the amounts.) Date Account Titles and Explanation Debit Credit Dec. 31, 2021 SHOW LIST OF ACCOUNTS LINK TO TEXT In practice, which method would recognize losses earlier-the incurred loss model or the expected loss model? The would recognize losses earlier