Four independent situations follow. 

1. Wen Corporation incurred the following costs when it issued bonds: printing and engraving costs, $25,000; legal fees, $69,000; and commissions paid to underwriter, $70,000. 

2. Griffith Inc. sold $3 million of 10-year, 10% bonds at 104 on January 1, 2020. The bonds were dated January 1, 2020 and pay interest on July 1 and January 1. 

3. Kennedy Inc. issued $600,000 of 10-year, 9% bonds on June 30, 2020, for $562,613. This price provided a yield of 10% on the bonds. Interest is payable semi-annually on December 31 and June 30. 

4. Bergevin Corporation issued $800,000 of bonds on January 1, 2020, with interest payable each January 1. The bonds' carrying amount on December 31, 2020, is $850,716.97. Bergevin has chosen to apply the fair value option in accounting for the bonds. An assessment of the company's credit risk at December 31, 2020, shows that it has increased. As a result, the bonds' fair value is $838,000 on that date. Bergevin prepares financial statements in accordance with IFRS. 

Instructions 

a. In situation 1, what accounting treatment could be given to these costs? 

b. In situation 2, if Griffith follows ASPE and uses the straight-line method to amortize bond premium or discount, determine the amount of interest expense to be reported on July 1, 2020, and December 31, 2020. 

c. In situation 3, if Kennedy uses the effective interest method, determine the amount of interest expense to record if financial statements are issued on October 31, 2020. 

d. In situation 4, what accounting treatment should be given to the bonds at December 31, 2020? 

e. Prepare the journal entry to revalue the bonds under the fair value option for situation 4 under (1) IFRS and (2) ASPE. Round to the nearest dollar.