es IFRS and acc
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On January 1, 2020, Pina Colada Corp. acquires $310,000 of Spider Products Inc. 9% bonds at a price of $294,849. The
interest is payable each December 31, and the bonds mature on December 31, 2022. The investment will provide Pina
Colada Corp. with a 11% yield. Pina Colada Corp. applies IFRS and accounts for this investment using the amortized cost
model.
Prepare a three-year bond amortization schedule. (Round answers to 0 decimal places, e.g. 5,275.)
Prepare the journal entry to record interest received and interest income on December 31, 2021. (Credit account titles are
automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for
the account titles and enter O for the amounts. Round answers to 0 decimal places, e.g. 5,275.) Prepare the journal entries
to record interest received and interest income on December 31, 2022, and the maturity of the bond. (Credit account titles
are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry"
for the account titles and enter O for the amounts. Round answers to 0 decimal places, e.g. 5,275.)
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