Question

On January 1, 2020, Pina Colada Corp. acquires $310,000 of Spider Products Inc. 9% bonds at a price of $294,849. The interest is payable each December 31, and the bonds mature on December 31, 2022. The investment will provide Pina Colada Corp. with a 11% yield. Pina Colada Corp. applies IFRS and accounts for this investment using the amortized cost model.

Prepare a three-year bond amortization schedule. (Round answers to 0 decimal places, e.g. 5,275.) Schedule of Interest Income and Bond Discount Amortization Effective Interest Method Date Cash Received Interest Income Bond Discount Amortization Carrying Amount of Bonds 01/01/20 $enter a dollar amount rounded to 0 decimal places 12/31/20 $enter a dollar amount rounded to 0 decimal places $enter a dollar amount rounded to 0 decimal places $enter a dollar amount rounded to 0 decimal places enter a dollar amount rounded to 0 decimal places 12/31/21 enter a dollar amount rounded to 0 decimal places enter a dollar amount rounded to 0 decimal places enter a dollar amount rounded to 0 decimal places enter a dollar amount rounded to 0 decimal places 12/31/22 enter a dollar amount rounded to 0 decimal places enter a dollar amount rounded to 0 decimal places enter a dollar amount rounded to 0 decimal places enter a dollar amount rounded to 0 decimal places SHOW LIST OF ACCOUNTS LINK TO TEXT

Prepare the journal entry to record interest received and interest income on December 31, 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 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275.) Date Account Titles and Explanation Debit Credit Dec 31, 2021 enter an account title for the journal entry on December 31 enter a debit amount enter a credit amount enter an account title for the journal entry on December 31 enter a debit amount enter a credit amount enter an account title for the journal entry on December 31 enter a debit amount enter a credit amount SHOW LIST OF ACCOUNTS LINK TO TEXT

Prepare the journal entries to record interest received and interest income on December 31, 2022, and the maturity of the bond. (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 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275.) Date Account Titles and Explanation Debit Credit Dec 31, 2022 enter an account title to record collection of interest on December 31 enter a debit amount enter a credit amount enter an account title to record collection of interest on December 31 enter a debit amount enter a credit amount enter an account title to record collection of interest on December 31 enter a debit amount enter a credit amount (To record collection of interest) Dec 31, 2022 enter an account title to record maturity of bond investment on December 31 enter a debit amount enter a credit amount enter an account title to record maturity of bond investment on December 31 enter a debit amount enter a credit amount (To record maturity of bond investment) SHOW LIST OF ACCOUNTS LINK TO TEXT

Prepare the entry for the disposal of the investment if Pina Colada had sold the bond on December 31, 2021 for $283,300 instead of holding it to maturity. Assume that 2021 interest received and interest income have already been recorded. (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 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275.) Account Titles and Explanation Debit Credit enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount

Answer 1

On january 1, 2020 , Pina Colada Corp Acquires $ 310,000 of Spider product
Acquired BOND(9%) at Prices of $ 294,894
So difference in Price$		15,106
(310000-$294894)
The Bond maturity on 31st Dec 2022
The investment will privide Yield 11%
Bond value amortized in 3 period of time $				5,035
($15106/3)
Cash receivaed against this Bond 9% on Face Value ( $ 310,000)
Cash received $		27,900	(9%*$310000)
First Part
Prepare three year amortization schedule
Schedule on Interest income + Bond Discount Amortization
Effective Interest Method
Date	Cash received$	Interest Income $	Bond Discount Amortization$	carrying Amount of Bonds $
01-01-2020	-			2,94,894
12-31-2020	27,900	32,935	5,035	2,99,929	(294894+5035)
12-31-2021	27,900	32,935	5,035	3,04,965	(299929+5035)
12-31-2022	27,900	32,935	5,035	3,10,000	(304965+5035)
Interest Income = Cash received + Bind Discount Amortized
Schedule on Interest income + Bond Discount Amortization
Effective Interest Method
Bond Purchased to Yield
Date	Cash received$-A	Interest Income $-B(11%*D)	Bond Discount Amortization$-C=(B-1)	carrying Amount of Bonds $-D
01-01-2020				2,94,894
12-31-2020	27,900	32,438	4,538	2,99,432	(294894+4538)
12-31-2021	27,900	32,938	5,038	3,04,470	(299432+5038)
12-31-2022	27,900	33,492	5,592	3,10,062	(304470+5592)
Journal Entries
Under First Phase -maturity to Bond
	Details	Debit($)	Credit($)
12-31-2021	Interest Receiveble	27,900
	Discount On Debt Investment	5,035
	Interest Revenue		32,935
12-31-2021	Interest Receiveble	27,900
	Discount On Debt Investment	5,038
	Interest Revenue		32,938
	Details	Debit($)	Credit($)
12-31-2022	Interest Receiveble	27,900
	Discount On Debt Investment	5,035
	Interest Revenue		32,935
12-31-2022	Interest Receiveble	27,900
	Discount On Debt Investment	5,592
	Interest Revenue		33,492
All Journal Entries number has been considered from above
details chart