Green Teaz (GT) has a December 31 fiscal year-end. The company purchased Hydro One bonds with face value of $10,000. These bonds were purchased on January 1, 2020, at a cost of $10,267. The bonds pay annual interest at 7% and mature on January 1, 2023. The yield on the date of purchase was 6%. These bonds had a market value of $10,200 and $10,100 at the end of 2020 and 2021, respectively. GT classified this investment as fair value through other comprehensive income (FVOCI).

Required:

a. Prepare the amortization schedule for GT’s investment in Hydro One bonds.

b. Record the journal entries for GT’s investment in Hydro One bonds for the years 2020 and 2021.

c. Suppose GT sells the Hydro One bonds for proceeds of $10,030 on June 30, 2022. Record the journal entry for the sale and the accrued interest income prior to sale.