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Amelia Company purchased $1,000,000 of 6% bonds of Elektra Company on January 1, 2016, paying $864,100. The bonds mature January 1, 2026. Interest is

 

Amelia Company purchased $1,000,000 of 6% bonds of Elektra Company on January 1, 2016, paying $864,100. The bonds mature January 1, 2026. Interest is payable each July 1 and January 1. The effective yield is 8%. Amelia uses the effective- interest method and plans to hold these bonds to maturity. By how much should Amelia increase its Debt Investments account for the Elektra bonds on July 1. 2016? [4 points] A For the year 2016, how much should Amelia report as interest revenue from the Elektra bonds? [4 points)

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