On January 1st, 20x1, Robert Company paid $92,278 for $100,000 of Evergreen Corp.'s 8% bonds that were available for sale. 12% is the market yield. Interest is paid on April 30 and October 31 of each year. Bush is a company with a calendar year. The right response is $4,556,500.
On December 31x1, Fox should declare $4,556,500.
Bonds are currently valued $4,580,000.
$50,000 Bonds are currently valued $4,530,000.
From July 1 to December 31, the discount is amortised over a six-month period: Bonds are currently valued $4,580,000.
$50,000 Bonds are currently valued $4,530,000.
From July 1 to December 31, the discount is amortised over a six-month period: Interest Income = $226.00 ($4,530,00% x 10% x 6/12)
In terms of interest-bearing quantities, $5,000,000 times 8% times six months is $200,000.
Interest revenue less interest due is equal to discounted interest.
Discount amortised is calculated as $226500 less $200000, or $2650.
As a result, $4,530,000 + $26,500 is the total that Fox must declare as of December 31, 2020, multiplied by one.
Thus, On December 31x1, Fox should declare $4,556,500.
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