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 2012 related to these bonds?
The question belongs to Accounting and it discusses about calculation of interest revenue from bonds for a particular year.
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