On January 1, 2020, Bridgeport Limited paid $407,397.70 for 14% bonds with a maturity value of $380,000. The bonds provide the bondholders with a 12% yield. They are dated January 1, 2020, and mature on January 1, 2025, with interest receivable on December 31 of each year. Bridgeport accounts for the bonds using the amortized cost approach, applies ASPE using the effective interest method, and has a December 31 year end.

Prepare the journal entry to record the bond purchase. (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
Jan 1, 2020

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List of Accounts

Prepare a bond amortization schedule. (Round answers to 2 decimal places, e.g. 52.75.)

Schedule of Interest Income and Bond Premium Amortization Effective Interest Method
Date	Cash Received		Interest Income		Premium Amortization		Carrying Amount of Bonds
01/01/20							$
12/31/20	$		$		$
12/31/21
12/31/22
12/31/23
12/31/24
	$		$		$

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List of Accounts

Prepare the journal entry to record interest received and interest income for 2020. (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
Dec 31, 2020

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List of Accounts

Prepare the journal entry to record interest received and interest income for 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 2 decimal places, e.g. 52.75.)

Date	Account Titles and Explanation	Debit	Credit
Dec 31, 2021

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List of Accounts

Prepare the journal entry to record the redemption of the bond at maturity. (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
Jan 1, 2025

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List of Accounts

If Bridgeport used the straight-line method of discount/premium amortization, prepare the journal entry to record interest received and interest income the company would make each 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.)

Account Titles and Explanation	Debit	Credit

eTextbook and Media

List of Accounts

Compare the total interest income reported over the five-year period under the effective interest method and the straight-line method. (Round answers to 0 decimal places, e.g. 5,275.)

		Total interest income
Effective interest method		$
Straight-line method		$

Total interest income under the two methods are the sameare different.