Lecture 03: Financial Asset at Fair Value through other comprehensive income

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Borras “the Godmother” Company acquired the following equity securities:

December 31, 2020 Cost Market

Warren Company 200,000 120,000
Jerome Company 400,000 280,000
Arthur Company 600,000 650,000

December 31, 2021

Warren Company 200,000 220,000
Jerome Company 400,000 300,000
Arthur Company 600,000 580,000

The equity securities do not qualify as held for trading.

The entity has elected irrevocably to present changes in fair value in other comprehensive income.

Prepare journal entries on December 31, 2020 and December 31, 2021

Lecture 02-03: Financial Asset at Fair Value

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Eljonah Company purchased equity securities during 2020 to be held as investments. The cost and
market value of the investments are:

December 31, 2020 Cost Market

Trading securities 2,000,000 2,500,000
Securities not held for trading 3,000,000 2,900,000

December 31, 2021

Trading securities 2,000,000 2,200,000
Securities not held for trading 3,000,000 3,300,000

The securities not held for trading are measured at fair value through other comprehensive income by
irrevocable election.
Prepare journal entries for 2020 and 2021.

Lecture 04: Financial Asset at Fair Value through other

comprehensive income (Debt Securities)
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On January 1, 2021, Sairuz Company purchased 12% bonds with face amount of P5,000,000 for
P5,380,000. The bonds provide an effective yield of 10%.

The bonds are dated January 1, 2021, mature on January 1, 2026 and pay interest annually on December
31 of the year.

The bonds are quoted at 120 on December 31, 2021 and 115 on December 31, 2022.

The entity has elected the fair value option for the bond investment.

Prepare journal entries for 2021 and 2022.