Accounting Question (Question 5)

Instructions: Refer to Background to answer Parts 1,2, and 3

Background: On January 1, 2020,SheffieldCorp. acquires $304,000of Spider Products Inc.8% bonds at a price of $288,880. The interest is payable each December 31, and the bonds mature on December 31, 2022. The investment will provideSheffieldCorp. with a10% yield.SheffieldCorp. applies IFRS and accounts for this investment using the amortized cost model.

Part 1

Instructions: Preparea three-year bond amortization schedule. For the following dates. Use the template below. (Round answers to 0 decimal places, e.g. 5,275.)

Dates

01/01/20

12/31/20

12/31/21

12/31/22

Template

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 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275.) Date Account Titles and Explanation Debit Credit Dec 31, 2021 Prepare the journal entries to record interest received and interest income on December 21, 2022, and the maturity of the band. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "Nho Entry" for the account titles and enter O for the amounts. Round answers to O decimal places, e.g. 5.275.) Date Account Titles and Explanation Debit Credit Dec 31, 2022 [To record collection of interest) Dec 31, 2022 [To record maturity of bond investment)Prepare the entry for the disposal of the investment if Sheffield had sold the bond on December 31, 2021 for $290,500 instead of holding it to maturity. Assume that 2021 interest received and interest income have : ready been recorded. (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 0 for the amounts. Round answers to O decimal places, es. 5,275) Account Titles and Explanation Debit CreditCash Interest Bond Discount Carrying Amount Received Income Amortization of Bonds $