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& Co. owns vast amounts of corporate bonds. Suppose Remote Down buys $ 500 comma 000...

& Co. owns vast amounts of corporate bonds. Suppose Remote Down buys $ 500 comma 000 of MayaCorp bonds at face value on January? 2, 2018. The MayaCorp bonds pay interest at the annual rate of 6?% on June 30 and December 31 and mature on December? 31, 2022. Remote Down intends to hold the investment until maturity. Read the requirements LOADING.... Requirement 1. How would the bond investment be classified on Remote Down's December? 31, 2018?, balance? sheet? The MayaCorp bond investment will be classified as a ? current asset current liability long-term asset long-term liability as of December? 31, 2018. Requirement 2a. Journalize on Remote Down's ?books: Receipt of final interest payment on December? 31, 2022.???(Record debits? first, then credits. Select the explanation on the last line of the journal entry? table.) Date Accounts and Explanation Debit Credit 2022 Dec. 31 Requirement 2b. Journalize on Remote Down's ?books: Disposition of the investment at maturity on December? 31, 2022. ?(Record debits? first, then credits. Select the explanation on the last line of the journal entry? table.) Date Accounts and Explanation Debit Credit 2022 Dec. 31

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Answer #1

Requirement 1.

Since the Bonds will be held till maturity, they need to be classified as Held till maturity or long term assets in Remote downs balance sheet on 31st March2018.

Requirement 2a.

Considering the market rate was also 6% , the last interest received journal entry would be

Date Particular Amount Amount
31/12/2022 Cash a/c $15,000
Interest in bonds

$15,000

(Being interest received on end of interest term)

Calculation of interest =$500,000*6%*6/12=15,000.

2b. Journal entry for disposal if bonds in maturity.

Date Particular Amount Amount
31/12/2022 cash $500,000
Investment in 6% Maya corp bonds $500,000

(Being cash realised on maturity of bonds)

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