On April 1, 2014, Transportation Imbalance Company (TIC) purchased $5,000 of 6% bonds as a long-term investment to be held to maturity. TIC is a private corporation that elects to report its financial results in accordance with ASPE. Its year end is December 31 an Interest dates are April 1 and October 1. The bonds mature 36 months from the purchase date. The purchase price of the bonds was $5,120, and the premium is amortized on the straight-line basis. Assume the proper adjusting entry was made on December 31, 2014, to record accrued interest receivable and amortization of the premium. The total interest revenue recorded by Transportation Imbalance Company on April 1, 2015 will be:

Question

Quizplus · Accepted Answer

The Answer of On April 1, 2014, Transportation Imbalance Company (TIC) purchased $5,000 of 6% bonds as a long-term investment to be held to maturity. TIC is a private corporation that elects to report its financial results in accordance with ASPE. Its year end is December 31 an Interest dates are April 1 and October 1. The bonds mature 36 months from the purchase date. The purchase price of the bonds was $5,120, and the premium is amortized on the straight-line basis. Assume the proper adjusting entry was made on December 31, 2014, to record accrued interest receivable and amortization of the premium. The total interest revenue recorded by Transportation Imbalance Company on April 1, 2015 will be:

On April 1, 2014, Transportation Imbalance Company (TIC) Purchased $5,000