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1. Champion Inc. acquired 5-year bonds of Samuel Corporation on October 1, 2021. Interest rks is payable semi-annually on April 1 and October 1
1. Champion Inc. acquired 5-year bonds of Samuel Corporation on October 1, 2021. Interest rks is payable semi-annually on April 1 and October 1 of each year. Other information pertaining to this investment follows: Face value of bonds Coupon rate on bonds Effective interest rate on bonds Fair value of bonds on September 30, 2022 $ 828,360 7% 5% $ 869,778 Assume that Champion Inc. follows ASPE, and uses the effective interest method and the FV-NI method to account for its bond investment. Champion Inc. has a September 30 year end. Required: 1. Calculate the amount at which Champion Inc. purchased its bond investment on October 1, 2021 and prepare the journal entry for the purchase. (3 marks) 2. Prepare an amortization schedule for the bond for the period of October 1, 2021 to October 1, 2023. (2 marks) 3. Prepare any journal entries required on each of the following dates: April 1, 2022 (1.5 marks) September 30, 2022 (4 marks) (a) (b) 4. Assume that Champion Inc. sold this investment on October $ 1, 2022 for the following amount: 870,213 Prepare the journal entry to record the disposal of the investment. (1.5 marks)
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