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How much should HIBISCUS report as interest income

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Question - On January 1, 2020, HIBISCUS Company purchased 4,000 of 1,000 face value, 10% bonds of IXORA Company for 4,270,600. The bonds will mature on January 1, 2025 and pay interest semi-annually on January 1 and July 1. Bonds effective interest rate is 8%. HIBISCUS has a business model of collecting all the contractural cash flows related to the instrument. How much should HIBISCUS report as interest income on the bonds? Solutions must be in proper accounting form.

Reference no: EM132948934

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