Bridgeport Corp. invested in a three-year, $100 face value 7% bond, paying $85.83. At this price, the bond will yield a 13% return. Interest is payable annually.

Prepare a bond discount amortization table for Bridgeport Corp., assuming Bridgeport uses the effective interest method required by IFRS. (Round answers to 2 decimal places, e.g. 52.75.)

Bond Discount Amortization Table
Date		Cash Received		Interest Income		Bond Discount Amortization		Amortized Cost of Bond
Day 1								$enter a dollar amount
End Year 1		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount		enter a dollar amount
End Year 2		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
End Year 3		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
		$enter a total amount		$enter a total amount		$enter a total amount

eTextbook and Media

List of Accounts

Prepare journal entries to record the initial investment, receipt of interest, and recognition of interest income in each of the three years, and the maturity of the bond at the end of the third year. (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 2 decimal places, e.g. 52.75.)

Date	Account Titles and Explanation	Debit	Credit
Day 1	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
End of Year 1	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
End of Year 2	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
End of Year 3	enter an account title to record interest collected	enter a debit amount	enter a credit amount
	enter an account title to record interest collected	enter a debit amount	enter a credit amount
	enter an account title to record interest collected	enter a debit amount	enter a credit amount
	(To record interest collected)
	enter an account title to record maturity of bond investment	enter a debit amount	enter a credit amount
	enter an account title to record maturity of bond investment	enter a debit amount	enter a credit amount
	(To record maturity of bond investment)

eTextbook and Media

List of Accounts

Assuming Bridgeport Corp. applies ASPE and has chosen to use the straight-line method of amortization, determine the amount of discount that is amortized each year. (Round answer to 2 decimal places, e.g. 52.75.)

Straight-line discount amortization $enter a dollar amount each year.

eTextbook and Media

List of Accounts

Under the above assumption, prepare journal entries to record the initial investment receipt of interest, and recognition of interest income in each of the three years, and the maturity of the bond at the end of the third year. (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 2 decimal places, e.g. 52.75.)

Date	Account Titles and Explanation	Debit	Credit
Day 1	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
End of Year 1	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
End of Year 2	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
End of Year 3	enter an account title to record interest collected	enter a debit amount	enter a credit amount
	enter an account title to record interest collected	enter a debit amount	enter a credit amount
	enter an account title to record interest collected	enter a debit amount	enter a credit amount
	(To record interest collected)
	enter an account title to record maturity of bond investment	enter a debit amount	enter a credit amount
	enter an account title to record maturity of bond investment	enter a debit amount	enter a credit amount
	(To record maturity of bond investment)

eTextbook and Media

List of Accounts

Compare the total interest income under the two methods over the three-year period. (Round answers to 2 decimal places, e.g. 52.75.)

Effective interest method		$enter a dollar amount
Straight line method		$enter a dollar amount

Total interest income under the two methods select an option are sameare different.