On July 1, 2010, Wheeler Company purchased $4,000,000 of Duggan Companys 8% bonds, due on July 1,

Question:

On July 1, 2010, Wheeler Company purchased $4,000,000 of Duggan Company’s 8% bonds, due on July 1, 2017. The bonds, which pay interest semiannually on January 1 and July 1, were purchased for $3,500,000 to yield 10%. Determine the amount of interest revenue Wheeler should report on its income statement for year ended December 31, 2010.