Problem 3 (8 marks) Soho Corporation's investments in financial assets as at December 31, 2020...
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Problem 3 (8 marks) Soho Corporation's investments in financial assets as at December 31, 2020 were as follows: (before adjustments at the end of the year) Investment Classification FVTOCI Ava Corp. shares Sima Inc. shares Original Cost 250,000 150,000 400,000 Carrying Value 380,000 220,000 600,000 Fair Value 350,000 260,000 610,000 FVTPL During 2021, the following transactions took place: On January 1, 2021, Soho purchased bonds of James Corporation with a face value of $200,000. The bonds mature on December 31, 2026 and pay semi-annual interest. The coupon is 4%. The bonds were purchased to yield 3.5%. Soho classifies these bonds as FVTOCI. On May 31, 2021, the shares of Ava Corp. were sold for $330,000. On November 31, 2021, the shares of Sima Inc. were sold for $240,000. James Corporation bonds are trading at 105 at Dec 31, 2021. Required: Prepare the adjusting entry at December 31, 2020 as well as all journal entries for the year ended December 31, 2021 for the above transactions. Soho is a publicly accountable entity
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