QUESTION On October 1, 2004, Porter Co. purchased to hold to maturity, 1,200, $1,000, 9% bonds for $1,188,000 which includes $18,000 accrued interest. The bonds, which mature on February 1, 2013, pay interest semiannually on February 1 and August 1. Porter uses the straight-line method of amortization. The bonds should be reported in the December 31, 2004 balance sheet at a carrying value of
A. $1,170,000
B. $1,170,900
C. $1,188,000
D. $1,188,360
Answer:D
QUESTION On October 1, 2004, Porter Co. purchased to hold to maturity, 1,200, $1,000, 9% bonds for $1,188,000 which includes $18,000 accrued interest. The bonds, which mature on February 1, 2013, pay interest semiannually on February 1 and August 1. Porter uses the straight-line method of amortization. The bonds should be reported in the December 31, 2004 balance sheet at a carrying value of
A. $1,170,000 B. $1,170,900 C. $1,188,000 D. $1,188,360