On December 31, 2015, Martin Corp invested in Marlin’s 5-year, $200,000 bond with a 5% interest rate for $191,575. The bond pays semiannual interest on June 30th and December 31st. The fair values of the bonds at the end of 2016~2018 are $194,500, $194,200, and $195,750. Martin sold its investment in Marlin’s bond on July 1, 2019 at 98 ½ (i.e. selling price is = 98.5% of the face value). Please answer all following questions using Excel Template. Any help would be appreciated, I would really like to see the journal entries and how one got the answers to them. Assuming the bonds are classified as held-to-maturity investments, Prepare the journal entries on December 31, 2015 Prepare the journal entries related to the bond on December 31, 2016. Prepare the journal entries related to the bond on December 31, 2018. Prepare the journal entries related to the bond on July 1 2019. Assuming the bonds are classified as AFS investment, prepare the journal entries on aforementioned dates. Assuming the bonds are classified as Trading investment, prepare the journal entries on aforementioned dates.

Q: On January 1, 2021, Kaye Ltd. purchased $250,000 of Danford Co.'s 4%, 8-year bonds.  The market rate…

A: Under Effective Interest Rate Method , Interest Income/Expense will be recognized at Market Rate.

Q: Colah Company purchased $1 million of Jackson, Inc., 5% bonds at par on July 1, 2018, with interest…

A:

Q: WBE Ltd. sold $7,660,000 of 12% bonds, which were dated March 1, 2023, on June 1, 2023. The bonds…

A: The bonds are issued either by government entty or coproration to raise money. The bonds are the…

Q: Record the collection of the interest and the sale of the bonds. (List all debit entries before…

A: Bond is a type of loan issued by corporation to finance its business operation.It is issued at…

Q: On January 1, 2020, Beckham acquired a 2,000,000, 5-year bond, 10% bond for 2,169,329. Transaction…

A: bond is a type  of loan obtained by company, on which a specific rate of interest is paid. FVTOCI is…

Q: On January 1, 2020, Apple Co. purchased held-for-collection and sales bonds par value $2,000,000, 9%…

A: Bond valuationwhen the market interest rate is higher than the coupon interest rate, then the bond…

Q: ased 1,000 Diamond Corporation bonds in 2018 for $500 per bond and classified the investment as…

A: Reclassification adjustment is the reversal of the unrealized gain /loss identifed in OCI by…

Q: On January 1, 2017, Sarasota Corporation purchased 331 of the $1,000 face value, 9%, 10-year bonds…

A: The problem is asking us to calculate the purchase price of the bonds bought by Sarasota…

Q: On December 31, 2015, Martin Corp invested in Marlin’s 5-year, $200,000 bond with a 5% interest rate…

A: Available-for-sale securities are one of the types of investments held for the purpose of resale of…

Q: On December 31, 2015, Martin Corp invested in Marlin's 5-year, $200,000 bond with a 5% interest rate…

A: Market interest rate is the yield to maturity of the bond. It is the rate which the investors will…

Q: Adam Corporation purchased 1,000 bonds of Quick Corporation in 2018 for $800 per bond and classified…

A: As per the accounting standard the securities are recorded in books two ways either as held to…

Q: Spring Company sells $250,000 of 6%,15-year bonds for 56.886 on April 1,2021.The market rate of…

A: Bonds payable is one of the liability being incurred in business. It can be long term bonds or short…

Q: Titania Co. sells $400,000 of 12% bonds on June 1, 2020. The bonds pay interest on December 1 and…

A: Bonds are a form of loan or debt that is being issued by the company and on which regular interest…

Q: 1/2026 78,000 Rain Technology sold the bonds on July 14, 2027, for $81,000. Required: 1. Prepare…

A: Bond Accounting- The method utilized to include bond-related transactions in your financial…

Q: On April 1, 2020, Purefoods Company purchased a bond for P910,000 including accrued interest and…

A: The amount by which the proceeds from the sale of investments were greater than the carrying value…

Q: d? Prepare an amortization schedule related to the bond investment in Marlin. How does Martin’s…

A: Market interest rate is the yield to maturity of the bond. It is the rate which the invetsors will…

Q: On January 3, 2024, Oriole Company acquires $410000 of Pharoah Company's 10-year, 10% bonds for…

A: Step 1: Compute the coupon interest Face value      410,000  multiply: Coupon rate 10% Coupon…

Q: On December 31, 2015, Martin Corp invested in Marlin’s 5-year, $200,000 bond with a 5% interest rate…

A: Bonds - Bonds are fixed-income securities that reflect loans from investors to borrowers (typically…

Q: Nash Co. sells $360,000 of 12% bonds on June 1, 2020. The bonds pay interest on December 1 and June…

A: Bonds: Bonds are the debt obligations of a business on which it requires to pay regular interest to…

Q: On January 1, 2023, Pronghorn Limited pays $105,753 to purchase $110,000 of Chan Corporation 9%…

A: Bonds selling at a price below the face value result in discount. The discount on bonds is amortized…

Q: On January 1, 2010, the Wender Company paid $223,515 to purchase bonds with a face value of…

A: The company can purchase the bonds. The company invests to diversify the portfolio or minimize the…

Q: Fowler Inc. purchased $75,000 of bonds on January 1, 2018. The bonds pay interest semiannually and…

A: Debt investments: The financial instruments which are bought by investors, or corporations, or…

Q: On January 1, 2020, Carla Corporation issued $4, 920,000 of 10% bonds at 103 due December 31, 2029.…

A: There are a number of expenses involved in the process of issuing and selling bonds to investors…

Q: Skysong, Incorporated sold its 8% bonds with a maturity value of $7,920,000 on August 1, 2019 for…

A: A bond is a debt security. It is a fixed income investment that represents a loan made by investor…

Q: On January 1, 2015, Vaughn Manufacturing issued $17820000 of 10% ten-year bonds at 1 The bonds are…

A: Straight line basis is a method of calculating depreciation and amortization, the process of…

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.