Martin Company acquired $500,000 face value of the outstanding bonds of Tory Company on January 1, 2012.The bonds pay interest semiannually on June 30 and December 31 at an annual rate of 7% and mature on December 31, 2014.The bonds were priced on the market on January 1, 2012, to yield 6% compounded semiannually.Martin Company classifies these bonds as held to maturity.
a.Compute the amount that Martin Company paid for these bonds, excluding commissions and taxes.
b.Prepare an amortization table for these bonds.
c.Give the journal entries that Martin Company would make to account for these bonds during 2012.
d.Give the journal entries that Martin Company would make to account for these bonds on December 31, 2014.

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The Answer of Martin Company acquired $500,000 face value of the outstanding bonds of Tory Company on January 1, 2012.The bonds pay interest semiannually on June 30 and December 31 at an annual rate of 7% and mature on December 31, 2014.The bonds were priced on the market on January 1, 2012, to yield 6% compounded semiannually.Martin Company classifies these bonds as held to maturity.
a.Compute the amount that Martin Company paid for these bonds, excluding commissions and taxes.
b.Prepare an amortization table for these bonds.
c.Give the journal entries that Martin Company would make to account for these bonds during 2012.
d.Give the journal entries that Martin Company would make to account for these bonds on December 31, 2014.

Martin Company Acquired $500,000 Face Value of the Outstanding Bonds