Cleveland purchased $100,000 of Rob Company's 10-year, 9 percent bonds for $83,050 on July 1, 2012. Cleveland purchased the bonds to yield 12 percent interest. If Cleveland uses the effective-interest method to amortize discounts, how much interest revenue should Cleveland recognize for 2012 as a result of the investment?

Question

Quizplus · Accepted Answer

The Answer of Cleveland purchased $100,000 of Rob Company's 10-year, 9 percent bonds for $83,050 on July 1, 2012. Cleveland purchased the bonds to yield 12 percent interest. If Cleveland uses the effective-interest method to amortize discounts, how much interest revenue should Cleveland recognize for 2012 as a result of the investment?

Cleveland Purchased $100,000 of Rob Company's 10-Year, 9 Percent Bonds