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Madox Company purchased $ 4 0 0 , 0 0 0 of 1 0 % bonds of Scott Co . on January 1 , 2

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Madox Company purchased $400,000 of 10% bonds of Scott Co. on January 1,2011, $376,100. The bonds mature January 1,2021 ; interest is payable each July 1 and Janu The discount of $23,900 provides an effective yield of 11%. Madox Company uses the effective-interest method and holds these bonds for collection.
On July 1,2011, Madox Company should increase its Debt Investments account Scott Co. bonds by
Select one:
a. $2,392.
b. $686.
c. $1,371.
d. $1,196
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