Xing Corp. has a 31 December year-end and adopts IFRS for financial reporting.
The following data relate to bonds issued by Xing Corp:
• Bond issue date: 1 January 20X6
• Total face value: $100,000
• Stated interest rate: 7%
• Effective interest rate: 6%
• Interest payment date: 31 December
• Bond maturity date: 31 December 20X10

Required:
1. Prepare an amortization table using the effective interest method.
2. Provide all the required journal entries for the bonds for 20X6 using the effective interest method.
3. $30,000 of the bond face value is repurchased on 1 April 20X7 at a price of 90. Provide the entries to update the bond accounts in 20X7.
4. How does the retirement of a portion of the bonds affect the accounting for the remaining bond issue that is not retired?
5. Refer to your answer to requirement 3 above. Explain why a gain or loss arose on retirement.