On January 1,2015,Forrest Marine Supplies purchased a Government of Canada bond at par for $8,000.The bond has an interest rate of 5% and matures in three years.By December 31,2015,market interest rates had increased such that the fair value of the bond decreased to $7,200.The fair value of the bond decreased further to $7,100 on December 31,2016 (two years after purchase).
Required:
Assume that Forrest classifies the investment at fair value through OCI.
a.At what value should Forrest report this bond on its December 31,2015 balance sheet?
b.How much income or loss should Forrest report in 2015 in relation to this bond?
c.How much other comprehensive income (OCI)should Forrest report for 2015 in relation to this bond?
d.How much OCI (loss)should Forrest report for 2016 in relation to this bond?
e.How much is accumulated OCI on the balance sheet at December 31,2016?

Question

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The Answer of On January 1,2015,Forrest Marine Supplies purchased a Government of Canada bond at par for $8,000.The bond has an interest rate of 5% and matures in three years.By December 31,2015,market interest rates had increased such that the fair value of the bond decreased to $7,200.The fair value of the bond decreased further to $7,100 on December 31,2016 (two years after purchase).
Required:
Assume that Forrest classifies the investment at fair value through OCI.
a.At what value should Forrest report this bond on its December 31,2015 balance sheet?
b.How much income or loss should Forrest report in 2015 in relation to this bond?
c.How much other comprehensive income (OCI)should Forrest report for 2015 in relation to this bond?
d.How much OCI (loss)should Forrest report for 2016 in relation to this bond?
e.How much is accumulated OCI on the balance sheet at December 31,2016?

On January 1,2015,Forrest Marine Supplies Purchased a Government of Canada