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Prepare an amortization schedule for the bond for the period

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Reference no: EM133067228

Question - On January 1, 2022, Champion Inc. purchased a 10-year bond. Interest is payable semi-annually on January 1 and July 1 of each year. The bonds mature on January 1, 2032. Other information pertaining to this investment follows:

Face value of bond $ 543,000

The fair value of bond on December 31, 2022 $515,850

Coupon rate on bond 7%

The effective interest rate on bond 9%

Champion Inc. sold this bond investment on July 2, 2023, for the following amount: $523,350

Assume that Champion Inc. follows IFRS, and uses the effective interest method and the FV-OCI method to account for its bond investment.

Champion Inc. has a December 31 year-end.

Required -

1. Calculate the amount at which Champion Inc. purchased its bond investment on January 1, 2022.

2. Prepare an amortization schedule for the bond for the period of January 1, 2022 to January 1, 2024.

3. Prepare any journal entries required on each of the following dates:

(a) January 1, 2022

(b) July 1, 2022

(c) December 31, 2022

(d) July 1, 2023

(e) July 2, 2023

Reference no: EM133067228

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