On May 1, 2014, Kirmer Corporation purchased $900,000 of 12% bonds, interest payable on January 1 and July 1, for $843,900 plus accrued interest. The bonds mature on January 1, 2020. Amortization is recorded when interest is received by the straight-line method (by months and round to the nearest dollar). (Assume bonds are available for sale.)

Details:

(a) The bonds are sold on August 1, 2015 for $565,000 plus accrued interest. Prepare all entries required to properly record the sale.

Answer:

Cash............................................................................................... 847,500

Loss on Sale of Investments.......................................................... 8,775

Debt Investments................................................................ 856,275

$843,900 + [($56,100 68) 15]

Question:

How was the CASH $847,500 calculated ?