Question 1 On January 1, 2020, Swifty Limited paid $561,003.30 for 10% bonds with a maturity value of $540,000. The bonds provide the bondholders with a 9% yield. They are dated January 1, 2020, and mature on January 1, 2025, with interest receivable on December 31 of each year. Swifty 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 o for the amounts. Round answers to 2 decimal places, e.g. 52.75.) Date Account Titles and Explanation Debit Credit Jan 1, 2020 Cash 561003.30 Bond Investment at An 561003.30 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 $ 561003 12/31/20 $ 54000 $ 50491 3909 552094 12/31/21 54000 50138 3862 553232 12/31/22 54000 49791 4209 549023 12/31/23 54000 49412 4588 544435 12/31/24 54000 rectangular 48999 5001 539434 270000 248831 21569 $ $ 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 o for the amounts. Round answers to 2 decimal places, e.g. 52.75.) Date Account Titles and Explanation Debit Credit Dec 31, 2020 Interest Expense 50491 Bond Investment at Amort 3909 Cash 54400 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 o for the amounts. Round answers to 2 decimal places, e.g. 52.75.) Date Account Titles and Explanation Debit Credit Dec 31, 2021 Interest Expense 48999 Bond Investment at Amort 5001 Cash 54000 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 o for the amounts. Round answers to 2 decimal places, e.g. 52.75.) Date Account Titles and Explanation Debit Credit Jan 1, 2025 If Swifty 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 o for the amounts. Round answers to 2 decimal places, e.g. 52.75.) Account Titles and Explanation Debit Credit Compare the total interest income reported over the five-year period under the effective interest method and the straight-line method. (Round answers to 2 decimal places, e.g. 52.75.) Total interest income Effective interest method Straight-line method $ Rectangular Snip Total interest income under the two methods