Example 3: Patton Company purchased $1,500,000 of 10% bonds of Scott Company on January 1, 2021, paying $1,410,375. The bonds mature January 1, 2031; interest is payable each July 1 and January 1. The discount of $89,625 provides an effective yield of 11%. Patton Company uses the effective-interest method and plans to hold these bonds to maturity. Required: a. On July 1, 2021, Patton Company should increase its Debt Investments account for the Scott Company bonds by how much? b. For the year ended December 31, 2021, Patton Company should report interest revenue from the Scott Company bonds c. What is the balance of investment on December 31, 2021?