Madison Company is a land management company that generates most of its revenues through leasing land. The company experienced the following events during Year 2:

Madison Company issued $826,000 of 10-year, 6 percent bonds on January 1, Year 2. The bonds were issued at face value. Interest is payable in cash on December 31 of each year.

Madison Company immediately invested all the proceeds from the bond issue in land.

The land was immediately leased for an annual $136,000 of cash revenue, which was collected on December 31 of each year, beginning December 31, Year 2.

Madison Company paid the interest on the bond on December 31, Year 2.