question 3

Transcribed image text: Question 3 (10 points) Twilight Corporation purchased 7%, $50,000 par value bonds on January 1, 2020. The bonds were purchased to yield 6%. Interest is payable semi-annually on July 1 and January 1. The bonds mature on January 1, 2030. Twilight Corporation follows IFRS arid uses the effective interest method to amortize discounts or premiums. Twilight Corporation uses the cost/amortized cost method to account for the bond. Twilight Corporation has a fiscal year end of December 31. Required: 1. Calculate the purchase price of the bonds, and prepare the journal entry to record the purchase. 2. Prepare an effective interest amortization table for the first 2 interest payments for this bond. Round all amounts to the nearest dollar. 3. Prepare the journal entries required for the bond for the remainder of 2020. 4. Assume that the bond is sold at 102 on January 1, 2021. Record the journal entry for the sale. Rr