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Ivanhoe Company purchased $1600000 of 10% bonds of Scott Company on January 1, 2021, paying $1506375. The bonds mature January 1, 2031; interest is payable
Ivanhoe Company purchased $1600000 of 10% bonds of Scott Company on January 1, 2021, paying $1506375. The bonds mature January 1, 2031; interest is payable each July 1 and January 1. The discount of $93625 provides an effective yield of 11%. Ivanhoe Company uses the effective-interest method and plans to hold these bonds to maturity. On July 1, 2021, Ivanhoe Company should increase its Debt Investments account for the Scott Company bonds by
$9363.
$5701.
$4681.
$2851.
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