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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