On January 1, 2013, Mark Corporation purchased bonds with a face value of $500,000 for $475,413.60. The

Question:

On January 1, 2013, Mark Corporation purchased bonds with a face value of $500,000 for $475,413.60. The bonds are due December 31, 2015, carry a 10% stated rate, and were purchased to yield 12%. Interest is payable semiannually on June 30 and December 31. On January 1, 2015, in contemplation of a major acquisition, one-fourth of the bonds were sold for $127,000. The remainder were held until maturity.

Required:

Prepare journal entries to record the purchase of the bonds, each interest payment, the partial sale of the investment on January 1, 2015, and the retirement of the bond issue on December 31, 2015.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...