Sheridan Company purchased $1750000 of 10% bonds of Scott Company on January 1, 2021, paying $1645434. The bonds mature January 1, 2031; interest is payable each July 1 and January 1. The discount of $104566 provides an effective yield of 11%. Sheridan Company uses the effective-interest method and plans to hold these bonds to maturity. For the year ended December 31, 2021, Sheridan Company should report interest revenue from the Scott Company bonds of: O $175000. $185457. O $181163. O $180998.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Sheridan Company purchased $1750000 of 10% bonds of Scott Company on January 1, 2021, paying $1645434. The bonds mature
January 1, 2031; interest is payable each July 1 and January 1. The discount of $104566 provides an effective yield of 11%. Sheridan
Company uses the effective-interest method and plans to hold these bonds to maturity.
For the year ended December 31, 2021, Sheridan Company should report interest revenue from the Scott Company bonds of:
$175000.
O $185457.
O $181163.
O $180998.
Transcribed Image Text:Sheridan Company purchased $1750000 of 10% bonds of Scott Company on January 1, 2021, paying $1645434. The bonds mature January 1, 2031; interest is payable each July 1 and January 1. The discount of $104566 provides an effective yield of 11%. Sheridan Company uses the effective-interest method and plans to hold these bonds to maturity. For the year ended December 31, 2021, Sheridan Company should report interest revenue from the Scott Company bonds of: $175000. O $185457. O $181163. O $180998.
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