Gills Products, an IFRS reporter, acquired $2,960,000 face value, 5% bonds on January 1 of the current year when the market rate of interest was 10%. Gills plans to hold the bonds to generate cash flows by collecting contractual cash flows only, and it passes the SPPI test. Interest is paid annually each December 31. Gills purchased the bonds, which mature in 6 years, for $2,315,421. Gills amortizes the discount using the effective interest method. The fair value of the bonds at the end of the year is $2,185,455. Prepare the journal entries required on the date of acquisition and at the end of the first year after acquisition.