Scott Enterprises has excess cash to invest and pays $200,000 to buy $200,000 face value,8%,five year bonds of Hamilton Company bonds on July 1,2018.The bonds are issued on July 1,2018 and pay interest on June 30 and December 31.Scott will record interest revenue every six months for five years.

Question

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Scott Enterprises will record interest revenue every six months because the bonds pay interest semi-annually on June 30 and December 31, aligning with the typical accounting practice of recognizing interest income when it is earned.

Scott Enterprises Has Excess Cash to Invest and Pays $200,000