On July 1, 2008, Ingalls Company purchased $2,000,000 of Wilder Companys 8% bonds, due on July 1,

Question:

On July 1, 2008, Ingalls Company purchased $2,000,000 of Wilder Company’s 8% bonds, due on July 1, 2015. The bonds, which pay interest semiannually on January 1 and July 1, were purchased for $1,750,000 to yield 10%. Determine the amount of interest revenue Ingalls should report on its income statement for year ended December 31, 2008.