The Tudor Company acquired $500,000 of Carr Corporation bonds for $487,706.69 on January 1, 2007. The bonds

Question:

The Tudor Company acquired $500,000 of Carr Corporation bonds for $487,706.69 on January 1, 2007. The bonds carry an 11% stated interest rate, pay interest semiannually on January 1 and July 1, were issued to yield 12%, and are due January 1, 2010.

Required

1. Prepare an investment interest revenue and discount amortization schedule using:

a. The straight-line method

b. The effective interest method

2. Prepare the July 1, 2009 journal entries to record the interest revenue under both methods.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...