On January 1 2016 Mark Corporation purchased bonds with a
On January 1, 2016, Mark Corporation purchased bonds with a face value of $500,000 for $475,413.60. The bonds are due December 31, 2018, carry' a 10% stated rate, and were purchased to yield 12%. Interest is payable semiannually on June 30 and December 31. On January' 1, 2018, 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, 2018, and the retirement of the bond issue on December 31, 2018.
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