On January 3 , 2012 , Moss Co . acquires $400 000 of Adam Company's 10 - year , 10% bonds at a price of $425 , 672 to yield 9% . Interest is payable each December 31 . The bonds are classified as held - to - maturity . Assuming that Moss Co . uses the effective interest method , what is the amount of interest revenue that would be recognized in 2013 related to these bonds ? A ) $38 , 160 B ) $38 312 C ) $40 000 D ) $42 568