B Inc. purchased a $20,000 bond on its issue date, October 1, Year 1. The bond...
B Inc. purchased a $20,000 bond on its issue date, October 1,
Year 1. The bond pays interest at maturity, September 30, Year 4,
at a rate of 4% compounded annually. B Inc. has a December 31 year
end. What amount of interest must be included in income for Year
1?
Homework Answers
$200
($20,000 x 4% x 3/12)
Bonds purchased on October 1, and December 31 year-end, so the amount of interest must be included in income for Year 1 is for 3 months.
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