Reference no: EM132664669

Read the Project Details document and the following notes on events, transactions, and background information related to Sterling Industrial Equipment Inc., a company that reports under IFRS. It is recommended that you read the Project Details in conjunction with the Student Notes and make note of relevant sections that pertain to the key elements and accounting requirements in each question.

Problem 1: Journal entry amounts must include the supporting calculations. If journal entries for transactions already posted are prepared as part of your analysis, it should be clearly documented that these are for analysis purposes only and are not part of your answer. List your journal entries by transaction rather than chronologically.

Seven years ago, in January 20X0, Sterling issued $3,000,000 of 10-year, 9% bonds that pay interest semi-annually on June 30 and December 31. The bonds were issued when the market rate was 8%. Bond issuance costs were $200,000. The December 31, 20X6, payment of the semi-annual interest was recorded as a debit to interest expense of $135,000 and a credit to cash of $135,000.