On July 1, 2020, Allarco Inc. acquired the following bonds, which management's business model is to hold to maturity:

Bond		Price	Face Amount Purchases
Ludwing Inc. 8% bonds, maturity date December 31, 2027		108	$330,000
X-cell Inc. 6% bonds, maturity date, December 31, 2026		96.8	450,000

Both bonds pay interest annually on December 31. Premium and discount will be amortized on an effective interest basis. Assume a market rate of 7% and Allarco Inc. follows IFRS. Please make sure your final answer(s) are accurate to 2 decimal places.

1) Prepare the following journal entries to be made on their correct dates in 2020:

The acquisition of the investments. Accrued interest was paid on the acquisition dates, as appropriate.

The receipt of interest and the amortization of the premium or discount for Ludwig Inc.

The receipt of interest and the amortization of the premium or discount for X-cell Inc.

Enter the transaction letter as the description when entering the transactions in the journal. Dates must be entered in the format dd/mmm (i.e., January 15 would be 15/Jan)

2) Show the accounts and the corresponding amounts that would be reported in the 2020 income statement related to these investments.

	2020

3) Calculate the balance for each investment account on the financial statement date

2020