ABC Company purchased $900,000 of 10% bonds of CBA Company on January 1, 2015, paying $846,225. The

Question:

ABC Company purchased $900,000 of 10% bonds of CBA Company on January 1, 2015, paying $846,225. The bonds mature January 1, 2025; interest is payable each July 1 and January 1. The discount of $53,775 provides an effective yield of 11%. ABC Company uses the effective-interest method and plans to hold these bonds to maturity.
For the year ended December 31, 2015, ABC Company should report interest revenue from the
CBA Company bonds of:
a) $93,078
b) None of these answers are correct
c) $90,000
d) $95,382
e) $93,169