On December 31, 2015, Martin Corp invested in Marlins 5-year, $200,000 bond with a 5% interest rate for $191,575. The bond pays semiannual interest on June 30^th and December 31^st. 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 Marlins bond on July 1, 2019 at 98 (i.e. selling price is = 98.5% of the face value). Please answer all following questions using Excel Template.

1. What is the market interest rate for Marlins bond?
2. Prepare an amortization schedule related to the bond investment in Marlin. How does Martins investment classification (as HTM, AFS, or Trading) influence this amortization schedule?
3. 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, 2017
• Prepare the journal entries related to the bond on December 31, 2018
• Prepare the journal entries related to the bond on July 1 2019.

1. Assuming the bonds are classified as AFS investment, prepare the journal entries on aforementioned dates.
2. Assuming the bonds are classified as Trading investment, prepare the journal entries on aforementioned dates.

Question 2.

	Sandford Co. sells bonds on March 1, 2017. The bonds pay interest on September 1 and March 1. The due date of the bonds is September 1, 2020. Pertinent information follows:
		Par value of the bonds			$ 500,000
		Stated interest rate			10%
		Bond yield rate				12%

1. Calculate the bond price and bond discount using EXCEL function.
2. Prepare amortization schedule
3. Prepare journal entries for year 2017 and 2018.