On December 31, 2019, P226 Ltd. purchased bonds of 45ACP Ltd. The bonds mature on December 31, 2029, and have a maturity value of $5,000,000. The stated interest rate on the bonds is 4.2%. Interest is paid each June 30 and December 31. The bonds were purchased to yeild 4.6%. The bonds will be accounted for as FVNI and P226 follows IFRS 9.

a, What was the purchase price of the bonds?

b, Provide the 2020 journal entries for June 30 and Dec. 31 for P226. Use the net method and standard journal entry format.

c, On December 31, 2020, the bonds were available in the secondary market at a yield rate of 4.3%.

Provide the necessary Dec 31, 2020 journal entry.