On January 1, 2020, Novak Corp. acquires $307,000 of Spider Products Inc. 8% bonds at a price of $284,493. The interest is payable each December 31, and the bonds mature on December 31, 2022. The investment will provide Novak Corp. with a 11% yield. Novak Corp. applies IFRS and accounts for this investment using the amortized cost model.

Prepare a three-year bond amortization schedule. (Round answers to 0 decimal places, e.g. 5,275.)

Schedule of Interest Income and Bond Discount Amortization Effective Interest Method
Date		Cash Received		Interest Income		Bond Discount Amortization		Carrying Amount of Bonds
01/01/20								$enter a dollar amount rounded to 0 decimal places
12/31/20		$enter a dollar amount rounded to 0 decimal places		$enter a dollar amount rounded to 0 decimal places		$enter a dollar amount rounded to 0 decimal places		enter a dollar amount rounded to 0 decimal places
12/31/21		enter a dollar amount rounded to 0 decimal places		enter a dollar amount rounded to 0 decimal places		enter a dollar amount rounded to 0 decimal places		enter a dollar amount rounded to 0 decimal places
12/31/22		enter a dollar amount rounded to 0 decimal places		enter a dollar amount rounded to 0 decimal places		enter a dollar amount rounded to 0 decimal places		enter a dollar amount rounded to 0 decimal places

Prepare the journal entry to record interest received and interest income on December 31, 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 0 decimal places, e.g. 5,275.)

Prepare the journal entries to record interest received and interest income on December 31, 2022, and the maturity of the bond. (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 0 decimal places, e.g. 5,275.)

Date

Account Titles and Explanation

Debit

Credit

Dec 31, 2022

enter an account title to record collection of interest on December 31

enter a debit amount

enter a credit amount

enter an account title to record collection of interest on December 31

enter a debit amount

enter a credit amount

enter an account title to record collection of interest on December 31

enter a debit amount

enter a credit amount

(To record collection of interest)

Dec 31, 2022

enter an account title to record maturity of bond investment on December 31

enter a debit amount

enter a credit amount

enter an account title to record maturity of bond investment on December 31

enter a debit amount

enter a credit amount

(To record maturity of bond investment)

Prepare the entry for the disposal of the investment if Novak had sold the bond on December 31, 2021 for $282,800 instead of holding it to maturity. Assume that 2021 interest received and interest income have already been recorded. (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 0 decimal places, e.g. 5,275.)

Account Titles and Explanation	Debit	Credit
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