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Crane Company purchased $900000 of 11% bonds of Scott Company on January 1, 2021. paying $834375. The bonds mature January 1, 2031; interest is
Crane Company purchased $900000 of 11% bonds of Scott Company on January 1, 2021. paying $834375. The bonds mature January 1, 2031; interest is payable each July 1 and January 1. The discount of $65625 provides an effective yield of 12%. Crane Company uses the effective-interest method and plans to hold these bonds to maturity. On July 1, 2021, Crane Company should increase its Debt Investments account for the Scott Company bonds by O $563. O $3281. O $6563. O $1125.
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