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Prepare Super Ltd journal entry for the purchase

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Question - On October 1, Super Ltd purchased 7% bonds with a face value of $1,00,000 for trading purposes, accounting for the investment at fair value through net income. The bonds were priced at $1,023,000 to yield Super Ltd 5% and pay interest annually each October 1. Super Ltd has a December 31 year end, and at its date, the bonds fair value was $1,050,000. Assuming Super Ltd applied IFRS and follows a policy of not reporting interest income separately from investment income.

Prepare Super Ltd journal entry for the purchase of the investment.

Prepare Journal entry for the December 31 interest accrual.

Prepare Journal entry for the year-end fair value adjustment. Assuming Super Ltd applied ASPE, uses the effective-interest method and follows a policy of reporting interest income separately.

Reference no: EM132524166

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