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Carla Vista Company purchased $1250000 of 10% bonds of Scott Company on January 1, 2021, paying $1170375. The bonds mature January 1, 2031; interest is

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Carla Vista Company purchased $1250000 of 10% bonds of Scott Company on January 1, 2021, paying $1170375. The bonds mature January 1, 2031; interest is payable each July 1 and January 1. The discount of $79625 provides an effective yield of 11% Coria Vista Company uses the effective-interest method and plans to hold these bonds to maturity. On July 1, 2021. Carla Vista Company should increase its Debt investments account for the Scott Company bonds by O $3741. $1871 O $3981 $7963

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