On January 3, 2020, Ivanhoe Company acquires $520000 of Adam Company’s 10-year, 10% bonds at a...
On January 3, 2020, Ivanhoe Company acquires $520000 of Adam Company’s 10-year, 10% bonds at a price of $552090 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?
| $52000 |
| $55209 |
| $49480 |
| $49688 |
Homework Answers
|
Amortization for 2020 = (520,000*10%) - (552,090*9%) = 2312 Interest revenue to be recognized in 2021 = (552,090 - 2312)*9% = 49,480 |
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On January 3, 2020, Ivanhoe Company acquires $520000 of Adam
Company’s 10-year, 10% bonds at a...
Question 19 On January 3, 2020, Ivanhoe Company acquires $520000 of Adam Company’s 10-year, 10% bonds...
Question 19 On January 3, 2020, Ivanhoe Company acquires $520000 of Adam Company’s 10-year, 10% bonds at a price of $552090 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? $52000 $55209 $49480 $49688
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