Question

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Marshall purchased a bond on January 1, 2018, for $120,000. The bond has a face value of $120,000 and matures in 5 years. The bond pays interest on June 30 and December 31 at a 2 % annual rate. Marshall plans on holding the investment until maturity Read the euirements Requirement 1. Journalize the 2018 transactions related to Marshall's bond investment. Explanations are not required (Record debits first, then credits. Exclude explanations from journal entries.) Begin by journalizing Marshall's investment on January 1, 2018 Date Accounts Debit Credit Jan. 1 Next, journalize Marshall's receipt of interest on June 30, 2018 Date Accounts Debit Credit Jun. 30 Finally, jounalize Marshall's receipt of interest on December 31, 2018 Date Accounts Debit Credit Dec. 31

Answer 1

Solution 1:

Journal Entries
Date	Particulars	Debit	Credit
1-Jan-18	Bond investment Dr	$120,000.00
	To Cash		$120,000.00
	(To record investment in bond)
30-Jun-18	Cash Dr	$1,200.00
	To Interest revenue		$1,200.00
	(To record receipt of semi annual interest)
31-Dec-18	Cash Dr	$1,200.00
	To Interest revenue		$1,200.00
	(To record receipt of semi annual interest)

Solution 2:

Journal Entries
Date	Particulars	Debit	Credit
31-Dec-22	Cash Dr	$120,000.00
	To Bond investment		$120,000.00
	(To record receipt of maturity amount)