Question
On July 1, 2014, James Company purchased Timothy Company's six-year 9% bonds with a face value of $200,000 for $196,000, which included $6,000 of accrued
On July 1, 2014, James Company purchased Timothy Company's six-year 9% bonds with a face value of $200,000 for $196,000, which included $6,000 of accrued interest. The bonds, which mature on March 1, 2020, are to be held-to-maturity and pay interest semiannually on March 1 and September 1. James uses the straight-line method of amortization. The amount of income James should report for the calendar year 2014 as a result of this investment would be:
| A) | $8,823.52 | |
| B) | $9,882.36 | |
| C) | $9,529.40 | |
| D) | $8,117.64 |
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Intermediate Accounting
Authors: Donald E. Kieso, Jerry J. Weygandt, And Terry D. Warfield
13th Edition
9780470374948, 470423684, 470374942, 978-0470423684
