Patton Company purchased $900,000 of 10% bonds of Scott Company on January 1, 2015, paying $846,225. The bonds mature January 1,
2025; interest is payable each July 1 and January 1. The discount of $53,775 provides an effective yield of 11%. Patton Company uses the effective-interest method and plans to hold these bonds to maturity. On July 1, 2015, Patton Company should increase its Debt Investments account for the Scott Company bonds by :
$5,382.
$1,542.
$3,084.
$2,691
$5,382.
$1,542.
$3,084.
$2,691
1 answer:
Answer:
Answer for the question:
Patton Company purchased $900,000 of 10% bonds of Scott Company on January 1, 2015, paying $846,225. The bonds mature January 1, 2025; interest is payable each July 1 and January 1. The discount of $53,775 provides an effective yield of 11%. Patton Company uses the effective-interest method and plans to hold these bonds to maturity. On July 1, 2015, Patton Company should increase its Debt Investments account for the Scott Company bonds by :
$5,382.
$1,542.
$3,084.
$2,691
Is given in the attachment.
Explanation:
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