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Exam 8: Investments

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Question 131

Multiple Choice

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Regardless of the bonds purchase price, their amortized cost at maturity will equal

A) face value.
B) face value less premium amounts.
C) purchase price.
D) face value plus discount amounts.

E) B) and D)
F) B) and C)

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Question 132

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Under ASPE, only debt instruments will be reported at fair value.

A) True
B) False

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Question 133

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Under ASPE, a rental lease is called a capital lease.

Losses and gains on the sale of FVTPL instruments are reported on

A treasury bill is normally recorded at the face value of the instrument.

Instalment notes with blended payments are repayable in variable periodic amounts that include the principal and the interest.

A bond issued by a corporation may be issued without the permission of the board of directors of the company.

The Jeremy Evan's Company purchased 35% of the common shares outstanding of Gabi Ltd. on September 1, 2021, allowing them to Instructions Prepare all necessary journal entries for 2021 for Wallace Corporation.

When an investment is accounted for under the equity method, the payment of a dividend by the associate will reduce the amount shown on the balance sheet of the investor.

The entry to record an instalment payment on a non-current note payable is a) Mortgage Notes Payable $~~~~~~~~~~~$ Cash b) Interest Expense $~~~~~~~~~~~$ Cash c) Mortgage Notes Payable $~~~$ Interest Expense $~~~~~~~~~~~$ Cash d) Bonds Payable $~~~~~~~~~~~$ Cash

The interest expense recorded on an interest payment date is increased

Short-term debt instruments that are held to earn interest income are recorded as

If a bond investment that is held to earn interest is sold before maturity, an entry must be made to update any unrecorded interest and amortization of the discount or premium.

Instructions Assuming that Avonic is holding these investments for trading purposes: a) Prepare the adjusting entry at March 31, 2022 to report the portfolio at market value (Avonic uses only one account to record and report transactions for the portfolio of investments). b) Determine the amounts that will be reported in the March 31 financial statements of Avonic related to these investments.

If an investor owns less than 20% of the common shares of another corporation as a long-term investment,

If a corporation issued bonds at an amount less than face value, it indicates that the corporation has a weak credit rating.

Which of the following is a true statement about the accounting for investments held for trading under IFRS?

Which of the following is the correct match concerning an investor's influence on the operations and financial affairs of an investee?

Debt that is not current is non-current.

If the lessee has an option to purchase the leased asset at a price that is significantly below its fair value, this is considered