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Cullumber Company purchased $2100000 of 9% bonds of Scott Company on January 1, 2021, paying $1969147. The bonds mature January 1, 2031; interest is payable
Cullumber Company purchased $2100000 of 9% bonds of Scott Company on January 1, 2021, paying $1969147. The bonds mature January 1, 2031; interest is payable each July 1 and January 1. The discount of $130853 provides an effective yield of 10%. Cullumber Company uses the effective-interest method and plans to hold these bonds to maturity. For the year ended December 31, 2021, Cullumber Company should report interest revenue from the Scott Company bonds of:
| $189000. |
| $196914. |
| $197112. |
| $202085. |
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