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Your answer is partially correct. Following the three - step approach, prepare the journal entries for the sale of the bond on December 3 1
Your answer is partially correct.
Following the threestep approach, prepare the journal entries for the sale of the bond on December Include the
reclassification of unrealized gains and losses to net income. 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. List all debit entries before credit entries. Round answers to decimal places, eg
Account Titles and Explanation
To record fair value adjustment to date of disposal
FVOCI Investments
To record disposal of the bond
Loss on Disposal of Investments FVOCI
Unrealized Gain or Loss OCl
To reclassify accumulated unrealized gains and losses from OCI to
net income
eTextbook and Media On July Concord Aggregates Ltd purchased bonds with a maturity value of $ for $ The bonds provide
the bondholders with a yield. The bonds mature four years later, on July with interest receivable June and December
of each year. Concord uses the effective interest method to allocate unamortized discount or premium. The bonds are accounted
for using the FVOCI model with recycling. Concord has a calendar year end. The fair value of the bonds at December and
was $ and $ respectively. Assume fair value adjustments are recorded at year end only. Immediately after
collecting interest on December the bonds were sold for $ Please solve the attached image.
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