Smoke Corporation purchased a 9%, $100,000 bond investment in A Company on January 1, 2010. The following partial amortization table reflects the bond investment on January 1, 2010, with a 5 year term, (due Dec. 31, 2014) when the annual market rate of interest was 10%. Smoke follows IFRS.

Interest is paid to Smoke June 30 and Dec 31. Smoke has an April 30 year end.

Period Ended	Cash Interest Received	Interest Income	Amortized Bond Discount	Carrying Value
Jan. 1, 2010 (issue date)	---	---		96,139
Jan 1, 2010 - June 30, 2010	4500	4807	307	96,446
July 1, 2010 - Dec 31, 2010	4500	4823	323	96,769
Jan 1, 2011 - June 30, 2011	4500	4839	339	97,108
July 1, 2011 - Dec 31, 2011	4500	4856	356	97,464

Required:

1. the journal entry to record the purchase of the bond by Smoke at Jan 1, 2010.
2. the journal entry to accrue interest and adjust the bond investment at April 30, 2011. (round answers to the nearest dollar)
3. a classified partial balance sheet at April 30, 2011 to show the amortized cost bond investment and any associated interest. Use a proper three-line title.
4. the journal entry(ies) required at June 30, 2011.
5. How much total interest income would Smoke record over the entire term of the bond investment? 
6. If Smoke followed ASPE and used the straight line method to amortize bond discount, how much interest income would Smoke book over the entire term of the bond investment?

Answer rating: 100% (QA)

Requirement a Date General Journal Debit Credit 2010 Jan01 ... View the full answer