On January 3, 2020, Ivanhoe Company acquires $400000 of Adam Company's 10-year, 10% bonds at a price of $432090 to yield 9%. Interest is payable each December 31. The bonds are classified as held-to-maturity. Assuming that Ivanhoe Company uses the effective-interest method, what is the amount of interest revenue that would be recognized in 2021 related to these bonds?
On January 3, 2020, Ivanhoe Company acquires $400000 of Adam Company's 10-year, 10% bonds at a price of $432090 to yield 9%. Interest is payable each December 31. The bonds are classified as held-to-maturity. Assuming that Ivanhoe Company uses the effective-interest method, what is the amount of interest revenue that would be recognized in 2021 related to these bonds?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 1MC
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