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How much should hibiscus report as interest income on bonds

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Reference no: EM132895973

Question 1: 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?

Reference no: EM132895973

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