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Prepare a schedule of interest expense and bond amortization

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Question - On January 1st, 2020, Splish brothers inc. sold 15% bonds having a maturity value of $890000 for $920555, which provides the bond holders with a 14% yield. The bonds are dated January 1, 2020, and mature on January 1st,2025, with interest payable on January 1 of each year. The company follows IFRS and uses the effective interest period.

Required -

a) Prepare the journal entry at the date of issue.

b) Prepare a schedule of interest expense and bond amortization for 2020 through 2023.

c) Prepare the journal entry to record the interest payment and amortization for 2020.

d) Prepare the journal entry to record the interest payment and the amortization for 2022.

Reference no: EM132564475

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