(PLEASE DO NOT COPY THE SAME ANSWERS SOLUTION ON CHEGG THEY ARE WRONG)

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. 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,
• Prepare the journal entries related to the bond on December 31,
• 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.

Note: Market interest rate is 3%

Bond Amortization Schedule Date Interest received Interest Revenue Discount Amortized Carrying Value 31-Dec-15 $191,575 30-Jun-16 $5,000 $5,747 $747 $192,322 31-Dec-16 $5,000 $5,770 $770 $193,092 30-Jun-17 $5,000 $5,793 $793 $193,885 31-Dec-17 $5,000 $5,817 $817 $194,701 30-Jun-18 $5,000 $5,841 $841 $195,542 31-Dec-18 $5,000 $5,866 $866 $196,409 30-Jun-19 $5,000 $5,892 $892 $197,301 31-Dec-19 $5,000 $5,919 $919 $198,220 30-Jun-20 $5,000 $5,947 $947 $199,166 31-Dec-20 $5,000 $5,834 $834 $200,000