Landmark Corp.buys $300,000 of Schroeter Company's 8% five-year bonds at par value on September 1.Interest payments are made semiannually.All of the following regarding accounting for the securities are true except:

Question

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The semiannual interest payment amount for the bond is $12,000, not $24,000. Therefore, choice D is incorrect. The rest of the choices are correct. The debt securities should be recorded at the cost of $300,000 and will have a maturity value of $300,000. Interest revenue should be credited when an interest payment is received, and the semiannual interest payment amount is $12,000.