Wayaa acquired 1 million $1 equity shares in XY on 14 June 2018 for $1.85 per share and classified this investment as available for sale. Wayaa paid a 1% transaction fee to its broker on this transaction. XY’s shares were trading at $1.98 on 31 December 2018.
On 2 October 2018 Wayaa acquired 200,000 $0.50 equity shares in LM for $0.70 per share and classified this investment as held for trading. Wayaa paid a 0.5% transaction fee to its broker on this transaction. LM’s shares were trading at $1.15 on 31 December 2018.
ABC prepares its financial statements in accordance with the provisions of IAS 32 Financial instruments: presentation and IFRS 9 Financial instruments: Recognition and Measurement.
Required:
Prepare the journal entries to record the initial measurement AND the subsequent measurement of the investments in XY and LM in the financial statements of Wayaa for the year to 31 December 2018.
