Please verify and complete
Swifty Corp. invested in a three-year $100 face value 9% bond, paying $113.88. At this price, the bond will yield a 4% return. Interest is payable annually. Prepare a bond premium amortization table for Swifty Corp., assuming Swifty uses the effective interest method required by IFRS. (Round answers to 2 decimal places, eg. 52.75.) Bond Premium Amortization Table Bond Premium Interest Income Amortization Cash Received Amortized Cost of Bond $ $ 113.88 $ 9 $ 4.55 $ $ 4.45 109.43 9 4.38 4.62 109.26 ON 4.37 4.63 109.25 $ 27 13.3 $ 13.7 eTextbook and Media List of Accounts Prepare journal entries to record the initial investment, receipt of interest, and recognition of interest income in each of the three years, and the maturity of the bond at the end of the third 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 for the amounts. Round answers to 2 decimal places, eg. 52.75.) Date Account Titles and Explanation Debit Credit Day 1 Bond Investment at Amortized Cost 113.88 Cash 113.88 End of Year 1 Cash ON Bond Investment at Amortized Cost 445 Interest Income 4.55 End of Year 2 Cash 9 Bond Investment at Amortized Cost 4.62 Interest income 4.38 End of Year 3 Cash 9 Bond Investment at Amortized Cost 463 Interest Income 437 (To record interest collected) Cash 100 Bond Investment at Amortized Cost 100 (To record maturity of bond investment) Touth Assuming Swifty Corp. applies ASPE and has chosen to use the straight-line method of amortization, determine the amount of premium that is amortized each year. (Round answer to 2 decimal places, eg. 52.75.) Straight line premium amortization $ each year. eTextbook and Media List of Accounts Under the above assumption, prepare journal entries to record the initial investment, receipt of interest, and recognition of interest income in each of the three years, and the maturity of the bond at the end of the third 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 O for the amounts. Round answers to 2 decimal places, e.g. 52.75.) Date Account Titles and Explanation Debit Credit Day 1 End of Year 1 End of Year 2 End of Year 3 (To record interest collected) (To record maturity of bond investment) Compare the total interest income under the two methods over the three-year period. (Round final answers to 2 decimal places, eg, 52.75.) Effective interest method $ Straight line method $ Total interest income under the two methods
