On January 1, 2015, Montock Company purchased as held-to-maturity debt securities $250,000 face value of Stark Corporation's 10% bonds for $325,500. The bonds were purchased to yield 15% interest and pay interest annually. The bonds mature on January 1, 2020. Montock uses the effective interest method of amortization. What amount should Montock report on its December 15, 2015, balance sheet as an investment in held-to-maturity debt securities? A. $394, 325, B. $349,325, C. $320, 550, or D. $57,550.

Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter13: Investments And Long-term Receivables
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On January 1, 2015, Montock Company purchased as held-to-maturity debt securities $250,000 face
value of Stark Corporation's 10% bonds for $325,500. The bonds were purchased to yield 15% interest and
pay interest annually. The bonds mature on January 1, 2020. Montock uses the effective interest method
of amortization. What amount should Montock report on its December 15, 2015, balance sheet as an
investment in held-to-maturity debt securities? A. $394, 325, B. $349,325, C. $320, 550, or D. $57,550.
Transcribed Image Text:On January 1, 2015, Montock Company purchased as held-to-maturity debt securities $250,000 face value of Stark Corporation's 10% bonds for $325,500. The bonds were purchased to yield 15% interest and pay interest annually. The bonds mature on January 1, 2020. Montock uses the effective interest method of amortization. What amount should Montock report on its December 15, 2015, balance sheet as an investment in held-to-maturity debt securities? A. $394, 325, B. $349,325, C. $320, 550, or D. $57,550.
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