On January 1, 2020, a Company Pays $100,000 to Purchase

question 5

Essay

On January 1, 2020, a company pays $100,000 to purchase 100 Government of Canada bonds that have a maturity date of December 31, 2024 and an interest rate of 5%. At December 31, 2020, the bonds had a quoted price of $1,022 per bond. Assume that 45 of these bonds are sold on June 30, 2021 for $1,100 per bond plus accrued interest. Determine the gain or loss that would be recorded in 2021 assuming:
a. Classified at fair value through profit or loss
b. Classified at amortized cost

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Definitions:

Historical Pattern

The recurring or consistent sequence of events or behaviors over a period in history.

Analgesics

Medications designed to reduce or eliminate pain without causing loss of consciousness.

Morphine

A powerful analgesic drug derived from opium, used to relieve severe pain.

Howard Becker

A sociologist known for his work in labeling theory, which examines the societal response to deviance and the impact on individuals’ identities.