On 1 July 2018, Donald Ltd acquired some corporate bonds issued by Trump Ltd. These bonds cost Donald Ltd $2,132,485. They had a face value of $2 million and offered a coupon rate of 10 per cent paid annually ($200,000 per year, paid each 30 June). The bonds will repay the principal of $2 million on 30 June 2022. At the time the market only required a rate of return of 8 per cent on such bonds. Assume zero transaction costs.

Donald operates within a business model where corporate bonds are held in order to collect contractual cash flows and there is no intention to trade the bonds.

What is the interest revenue for the year ended 30 June 2019 and the amortised cost of the bonds at 30 June 2019?

Select one:

a.

Interest revenue	Amortised cost of bonds
$200,000	$2,132,485

b.

Interest revenue	Amortised cost of bonds
$170,599	$2,103,084

c.

Interest revenue	Amortised cost of bonds
$200,000	$2,000,000

d.

Interest revenue	Amortised cost of bonds
$170,599	$2,132,484

e.

Interest revenue	Amortised cost of bonds
$29,402	$2,103,084