Selected transactions on the books of Pfaff Corporation follow: 

May 1, 2020 Bonds payable with a par value of $700,000, which are dated January 1, 2020, are sold at 105 plus accrued interest. They are coupon bonds, bear interest at 12% (payable annually at January 1), and mature on January 1, 2030. (Use an interest expense account for accrued interest.) 

Dec. 31 Adjusting entries are made to record the accrued interest on the bonds and the amortization of the proper amount of premium. (Use straight-line amortization.) 

Jan. 1, 2021 Interest on the bonds is paid. 

April 1 Par value bonds of $420,000 are repurchased at 103 plus accrued interest and are retired. (Bond premium is to be amortized only at the end of each year.) 

Dec. 31 Adjusting entries are made to record the accrued interest on the bonds, and the proper amount of premium amortized. 

Instructions 

a. Assume that Pfaff follows ASPE. Prepare the journal entries for the transactions above. Round to the nearest dollar. 

b. How would your answers to the above change if Pfaff were to follow IFRS?