diff --git a/src/core/IronPython/Compiler/Ast/PythonAst.cs b/src/core/IronPython/Compiler/Ast/PythonAst.cs
index 383537c33..e95525361 100644
--- a/src/core/IronPython/Compiler/Ast/PythonAst.cs
+++ b/src/core/IronPython/Compiler/Ast/PythonAst.cs
@@ -369,6 +369,7 @@ internal MSAst.Expression ReduceWorker() {
                 var end = IndexToLocation(ret.Expression.EndIndex);
 
                 return Ast.Block(
+                    MakeEntrySequencePoint(ret.Expression.StartIndex),
                     Ast.DebugInfo(
                         _document,
                         start.Line,
@@ -381,6 +382,10 @@ internal MSAst.Expression ReduceWorker() {
             }
 
             ReadOnlyCollectionBuilder<MSAst.Expression> block = new ReadOnlyCollectionBuilder<MSAst.Expression>();
+
+            // Add beginning sequence point: the location of the 'call' trace event, as in FunctionDefinition.
+            // Without it, the first statement would take that role, and fire no 'line' event of its own.
+            block.Add(MakeEntrySequencePoint(_body is SuiteStatement { Statements: [var first, ..] } ? first.StartIndex : _body.StartIndex));
             AddInitialization(block);
 
             string doc = GetDocumentation(_body);
@@ -416,6 +421,13 @@ internal MSAst.Expression ReduceWorker() {
             return body;
         }
 
+        private MSAst.Expression MakeEntrySequencePoint(int index) {
+            var loc = index >= 0 ? IndexToLocation(index) : new SourceLocation(0, 1, 1);
+            return AstUtils.AddDebugInfo(
+                AstUtils.Empty(), _document, new SourceLocation(0, loc.Line, loc.Column), new SourceLocation(0, loc.Line, int.MaxValue));
+        }
+
+
         private void AddInitialization(ReadOnlyCollectionBuilder<MSAst.Expression> block) {
             if (IsModule) {
                 block.Add(AssignValue(GetVariableExpression(FileVariable), Ast.Constant(ModuleFileName)));
diff --git a/tests/suite/modules/system_related/test_sys.py b/tests/suite/modules/system_related/test_sys.py
index f70abbe16..fce53209c 100644
--- a/tests/suite/modules/system_related/test_sys.py
+++ b/tests/suite/modules/system_related/test_sys.py
@@ -155,18 +155,21 @@ def temp_func(*args, **kwargs):
         sys.settrace(None)
         self.assertEqual(sys.gettrace(), None)
 
-    @unittest.expectedFailure # https://github.com/IronLanguages/main/issues/740
     def test_cp24381(self):
+        # https://github.com/IronLanguages/main/issues/740
         CP24381_MESSAGES = []
 
         import sys
         orig_sys_trace_func = sys.gettrace()
-        def f(*args):
-            CP24381_MESSAGES.extend(args[1:])
-            return f
-
         cp24381_module = "cp24381_%d" % os.getpid()
         cp24381_file_name = cp24381_module + ".py"
+
+        def f(frame, event, arg):
+            # the import machinery (importlib) is Python code too, and is traced as well; keep the events of the module only
+            if os.path.basename(frame.f_code.co_filename) == cp24381_file_name:
+                CP24381_MESSAGES.extend((event, arg))
+            return f
+
         cp24381_contents  = """
 print('a')
 print('b')
@@ -185,6 +188,7 @@ def f():
                 __import__(cp24381_module)
         finally:
             sys.settrace(orig_sys_trace_func)
+            sys.modules.pop(cp24381_module, None)
             os.unlink(cp24381_file_name)
 
         self.assertEqual(CP24381_MESSAGES,
@@ -192,6 +196,45 @@ def f():
                 None, 'line', None, 'call', None, 'line', None, 'return', None,
                 'return', None])
 
+    def test_settrace_first_line(self):
+        # The first statement of module code gets a 'line' event of its own, as in a function.
+        # The 'call' event of module code is on the line of its first statement, as in Python 3.4.
+        # CPython changed that later: 3.10 puts it always on line 1, and 3.11 on line 0
+        check_module_call_line = is_cli or sys.version_info < (3, 10)
+
+        cases = [
+            ("x = 1\ny = 2\n",          "exec",   [('call', 1), ('line', 1), ('line', 2), ('return', 2)]),
+            ("\n\nx = 1\ny = 2\n",      "exec",   [('call', 3), ('line', 3), ('line', 4), ('return', 4)]),
+            ("'doc'\nx = 1\n",          "exec",   [('call', 1), ('line', 1), ('line', 2), ('return', 2)]),
+            ("def g(): pass\ng()\n",    "exec",   [('call', 1), ('line', 1), ('line', 2), ('call', 1), ('line', 1), ('return', 1), ('return', 2)]),
+            ("1 + 2",                   "eval",   [('call', 1), ('line', 1), ('return', 1)]),
+            ("x = 1",                   "single", [('call', 1), ('line', 1), ('return', 1)]),
+        ]
+
+        orig_sys_trace_func = sys.gettrace()
+        for source, mode, expected in cases:
+            events = []
+            def f(frame, event, arg):
+                if frame.f_code.co_filename == '<traced>':
+                    module_call = event == 'call' and frame.f_code.co_name == '<module>'
+                    events.append((event, None if module_call and not check_module_call_line else frame.f_lineno))
+                return f
+
+            if not check_module_call_line:
+                expected = [('call', None)] + expected[1:]
+
+            code = compile(source, '<traced>', mode)
+            try:
+                sys.settrace(f)
+                if mode == 'eval':
+                    eval(code, {})
+                else:
+                    exec(code, {})
+            finally:
+                sys.settrace(orig_sys_trace_func)
+
+            self.assertEqual(events, expected, (source, mode))
+
     def test_cp30130(self):
         def f(frame, event, arg):
             if event == 'exception':