On 1 January 20X5, Franco Ltd. purchased $430,000 of Gentron Company 5.00% bonds. The bonds pay semi-annual interest each 30 June and 31 December. The market interest rate was 6% on the date of purchase. The bonds mature on 31 December 20X0. The company has a 31 December year-end.

(PV of $1, PVA of $1, and PVAD of $1.) (Use appropriate factor(s) from the tables provided.)

Required: 1. Calculate the price paid by Franco Ltd. (Round your intermediate calculations to 2 decimal places and final answer to the nearest whole dollar amount. Round time value factor to 5 decimal places.)

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. (Round your answers to the nearest whole 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. Round your answers to the nearest whole dollar amount.)

4. Assume instead that the bond is classified as a FVTPL investment, and the fair value at the end of 20X5 was $415,000, and was $423,000 at the end of 20X6. Prepare the entries for each interest period in 20X5 and 20X6, 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. Round your answers to the nearest whole dollar amount.)

5. Show how the bond would be presented on the statement of financial position at the end of 20X5 and 20X6, if it were (a) AC and (b) FVTPL. (Round your answers to the nearest whole dollar amount.)

\begin{tabular}{|r|c|c|c|c|} \hline Period & \begin{tabular}{c} Cash \\ Payment \end{tabular} & \begin{tabular}{c} Interest \\ Revenue \end{tabular} & Amortization & \begin{tabular}{c} Bond Carrying \\ Value \end{tabular} \\ \hline 0 & & & & \\ \hline 1 & & & & \\ \hline 2 & & & & \\ \hline \end{tabular} 1 Record the first period revenue. 2 Record the second period revenue. 3 Record the third period revenue. 4 Record the fourth period revenue. Journal entry worksheet 4 Note: Enter debits before credits. 1 Record the first period revenue. 2 Record the second period revenue. 3 Record the holding gain/loss on investment for the year ended 205. 4 Record the third period revenue 5 Record the fourth period revenue. 6 Record the holding gain/loss on investment for the year ended 206. Journal entry worksheet 234 Note: Enter debits before credits. \begin{tabular}{|l|l|l|l|} \hline & & 206 & 205 \\ \hline (a) & AC investment & & \\ \hline & Investment in Gentron bond & & \\ \hline (b) & FVTPL investment & & \\ \hline & Investment in Gentron bond & & \\ \hline \end{tabular}