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On 1 January 205, Franco Ltd. purchased $530,000 of Gentron Company 7.00% bonds. The bonds pay semk-annual interest each 30 June and 31 December. The

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On 1 January 205, Franco Ltd. purchased $530,000 of Gentron Company 7.00% bonds. The bonds pay semk-annual interest each 30 June and 31 December. The market interest rate was 8% on the date of purchase. The bonds mature on 31 December 2010. The company has a 31 December year-end Required: 1. Calculate the price paid by Franco Ltd. (Do not round intermediate calculations. Round your final answer to the nearest dollar amount.) 2. Assume that the bond is classified as an AC investment. Construct a table that shows interest revenue reported by Franco, and the carrying value of the investment, for four interest periods. Use the effective-interest method. (Do not round intermediate calculations. Round your final answers to the nearest dollar amount.) 3. Prepare the entries for the first four interest periods based on your calculations in requirement 2 . (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Round your final answers to the nearest dollar amount.) Journal entrv worksheet 4. Assume instead that the bond is classifled as a FVTPL investment, and the fair value at the end of 205 was $515,000, and was $522,500 at the end of 206. Prepare the entries for each interest period in 205 and 206, and adjust the bond to fair value at the end of each fiscal year. (That is, the bond is not adjusted to fair value at each interest payment date, Just at the reporting date.) (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Round your final answers to the nearest dollar amount.) 5. Show how the bond would be presented on the statement of financial position at the end of 205 and 20X6, if it were (a) AC and (b) FVTPL (Do not round intermediate calculations. Round your final answers to the nearest dollar amount.)

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