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HP Company purchased $1,200,000 of 10% bonds of Dell Co. on January 1, 2016, paying $1,128,300. The bonds mature January 1, 2026; interest is payable
HP Company purchased $1,200,000 of 10% bonds of Dell Co. on January 1, 2016, paying $1,128,300. The bonds mature January 1, 2026; interest is payable each July 1 and January 1. The bonds provide an effective yield of 11%. HP Company holds these bonds for collection. For the year ended December 31, 2016, HP Company should report interest revenue from the Dell Co. bonds of: A. $127,176. B. $124,227. C. $124,104, D. $120,000. 0.5 points Save Ar On July 1, 2016, Alba Co. purchased Babco, Inc, 10-year, 9%, bonds with a face value of $500,000, for $470,000 ta 10% effective interest rates interest is payable semiannually on January 1 and July 1. The bends mature on July 1, 2026 Alba uses the effective interest method of amortization. The amount reported in Alba's 2016 income statement as a result of its helt-for-collection investment in Babco wis A. $23,500. B. $21,150. C. $22,500. 0 D. $20,000
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