On July 1, 2017, Rectangle, Inc. purchased Diamond Company's five-year 12% bonds with a face value of $500,000 for $569,000, which included $25,000 of accrued interest. The bonds, which mature on February 1, 2022, are to be held-to-maturity and pay interest on February 1 and August 1. Rectangle uses the straight-line method of amortization. The amount of income that Triangle would report for the calendar year 2017 as a result of this long-term investment would be

Question

Quizplus · Accepted Answer

The Answer of On July 1, 2017, Rectangle, Inc. purchased Diamond Company's five-year 12% bonds with a face value of $500,000 for $569,000, which included $25,000 of accrued interest. The bonds, which mature on February 1, 2022, are to be held-to-maturity and pay interest on February 1 and August 1. Rectangle uses the straight-line method of amortization. The amount of income that Triangle would report for the calendar year 2017 as a result of this long-term investment would be