Find the amount to be reported in fluck income statement

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Reference no: EM132602195

Question 1: On November 1, 2020, Fluck Corp. purchased 10-year, 9%, bonds with a face value of $ 360,000, for $ 324,000. An additional $ 10,800 was paid for the accrued interest, which is paid semi-annually on January 1 and July 1. The bonds mature on July 1, 2027 and will be held to maturity. Fluck uses the straight-line method of amortization and the amortized cost method for these bonds. Ignoring income taxes, the amount to be reported in Fluck's 2020 income statement as a result of this investment is

a) $ 6,300.

b) $ 6,000.

c) $ 5,400.

d) $ 4,800.

Question 2: On October 1, 2020, Berlin Corp. purchased 250, $ 1,000, 9% bonds for $ 260,000. An additional $ 7,500 was paid for the accrued interest, which is paid semi-annually on December 1 and June 1. The bonds mature on December 1, 2024 and will be held to maturity. Berlin uses the straight-line method of amortization and the amortized cost model for these bonds. Ignoring income taxes, the amount to be reported in Berlin's 2020 income statement as a result of this investment is

a) $ 3,750.

b) $ 5,025.

c) $ 5,625.

d) $ 6,225.

Reference no: EM132602195

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