1. Patton Company purchased $900,000 of 10% bonds of Scott 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%. Patton Company uses the effective-interest method and plans to hold these bonds to maturity. On July 1, 2015, Patton Company should increase its Debt Investments account for the Scott Company bonds by :

$5,382.

$1,542.

$3,084.

$2,691

2.

A __________ will result in a future increase in taxes payable if there are temporary differences in the current period.

Deferred tax liability

None of these answers are correct

Deferred tax asset

Deferred revenue

Deferred tax expense