On January 1, Year 1, Shine Corporation purchased as an investment $400,000 of 10-year, 8% bonds. The bonds pay interest semi-annually on June 30 and December 31. The bonds will yield 10% on an annual basis. All amounts are rounded to the nearest dollar. Shine Corporation intends to hold the bonds to maturity and therefore uses the cost/amortized cost model. Shine Corp. follows IFRS.

Required

1. Calculate the purchase price of the bond investment. (5 marks)
2. Prepare a bond amortization table for the bond. Use Excel and copy the table into your assignment. (6 marks)
3. Assuming the fiscal year is the calendar year, give all Shines Journal entries related to the bonds for Year 1 and Year 2. Year end is December 31. Hint: there are six journal entries. (14 marks)