ring or the journal entries. You have been engaged to audit the financial statements of Ellie's Shirt Co. for the year ended December 31, 2021. 4 5 6 7 The company follows IFRS. In examining the books, you became concerned with the following item: B The bookkeeper made the following entry each year on December 31st to record interest expense on the bonds payable: Account Title Interest expense Cash Debit Credit 18,000 18,000 The bonds mature in 5 years, have a face value of $300,000 and pay a stated interest rate of 6%. They were issued at a premium of $12,988 on January 1, 2020 to yield an effective interest rate of 5%. Interest is paid annually each December 31. From the correctly prepared amortization schedule, you obtain the following: Date Interest expense 01-Jan-20 31-Dec-20 31-Dec-21 Amortization amount Carrying Value 312,988 15,649 2,351 310,637 15,532 2,468 308,169 3 REQUIRED: Prepare the journal entries that the company's bookkeeper would prepare in 2021, assuming the errors are discovered while the 2021 books are still open. Ignore any income tax effects. The company uses contra-accounts for any bond 5 discount/premium. 5 Date Account Title 01-Jan-21 Discount on Bonds Payable Past Bonds Payable 31-Dec-21 Discount on Bonds Payable Current Bonds Payable Debit Credit