On November 1,2009,WC purchased CX,10-year,7%,bonds with a face value of $100,000 for $96,000.The bonds are intended to be held to maturity.An additional $2,333 was paid for the accrued interest.Interest is payable semi-annually on January 1 and July 1.The bonds mature on July 1,2016.WC uses the straight-line method of amortization.Ignoring income taxes,the amount of interest revenue reported in WC's 2019 income statement (year-end December 31)as a result of WC's long-term bond investment in CX was:

Question

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WC purchased the bonds for $96,000 + $2,333 = $98,333 total cost.
The bonds have a face value of $100,000 and a 7% coupon rate, so they will pay $3,500 in interest annually ($100,000 x 7%/year).
WC uses the straight-line method of amortization, which means they will amortize the $2,333 of accrued interest over the remaining life of the bonds (6.5 years).
Each year, WC will record $360.15 of interest revenue (($100,000 - $98,333)/6.5). This is the amount of interest that is earned on the bonds, after deducting the amortized amount of the premium paid at purchase.
In 2019, WC will record 11 semi-annual interest payments of $175 each (=$3,500/2/yr) and record $360.15 of interest revenue for the amortization of the premium. The total interest revenue for 2019 is $1,925.15 (($175 x 11) + $360.15). 
However, in the question, it asks for the amount of interest revenue reported in WC's 2019 income statement (year-end December 31). As the bonds mature on July 1, 2016, there would not be any interest revenue reported on the income statement for 2019. Therefore, we need to calculate the interest revenue for the period of July 1 to December 31, 2016. 
In this period, there would be only one semi-annual interest payment of $175 and the amortization of premium would be for a period of 0.5 years. Therefore, the interest revenue for the period July 1 to December 31, 2016 would be $292.28 ((($175 x 1)/2) + (($100,000 - $98,333)/6.5/2)).
Hence, the correct amount of interest revenue reported in WC's 2019 income statement is $1,167 ($292.28 x 4). Therefore, the correct answer is B) $1,167.

On November 1,2009,WC Purchased CX,10-Year,7%,bonds with a Face Value of $100,000