On November 1, 2017, Fluck Corp.purchased 10-year, 9%, bonds with a face value of $360,000, for $324,000.An additional $10,800 was paid for the accrued interest, which is paid semi-annually on January 1 and July 1.The bonds mature on July 1, 2021 and will be held to maturity.Fluck uses the straight-line method of amortization and the amortized cost method for these bonds.Ignoring income taxes, the amount to be reported in Fluck's 2017 income statement as a result of this investment is

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The discount on the bonds is $36,000 ($360,000 - $324,000) and is amortized over the life of the bonds (10 years). The annual amortization is $3,600 ($36,000 / 10). Since the bonds were purchased on November 1, 2017, only two months of amortization is recognized in 2017, which is $600 ($3,600 * 2/12). The interest income for two months is $5,400 ($360,000 * 9% * 2/12). Therefore, the total amount reported in the income statement is $6,000 ($5,400 + $600).