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On January 1, 2021, Rupar Retailers purchased $125,000 of Anand Company bonds at a discount of $9,000. The Anand bonds pay 6% interest but were

On January 1, 2021, Rupar Retailers purchased $125,000 of Anand Company bonds at a discount of $9,000. The Anand bonds pay 6% interest but were purchased when the market interest rate was 7% for bonds of similar risk and maturity. The bonds pay interest semiannually on June 30 and December 31 of each year. Rupar accounts for the bonds as a held-to-maturity investment, and uses the effective interest method. In Rupar's December 31, 2021, journal entry to record the second period of interest, Rupar would record a credit to interest revenue of:

Multiple Choice

  • $4,071.

  • $4,375.

  • $4,060.

  • $3,750.

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