On 1 January 20X2, Lucky Company purchased $ 5,000,000 of Fire Corporation 3% bonds, classified as an AC investment. The bonds pay semi- annual interest each 30 June and 31 December. The market interest rate was 4% on the date of purchase. The bonds mature on 30 December 20X11. At the end of 20X2, the bonds had a fair value of $ 4,800,000.

Required:

1. Calculate the price paid by Lucky Company.

2. Construct a table that shows interest revenue reported by Lucky for the first two interest periods. Use the effective- interest method.

3. Give entries for the first year assuming that the investment is classified as FVTPL.