On July 1, 2016, Overlin Corp

question 36

Multiple Choice

On July 1, 2016, Overlin Corp.purchased $100,000 of 8% bonds at face value.Interest is paid annually on June 30.If the accounting year for Overlin ends at December 31, 2016, what will be reported with respect to the bonds on that date?

• A) The carrying value of the bonds will be $108,000.
• B) The cash received in interest will be $8,000.
• C) Interest income in the amount of $4,000 will be accrued.
• D) A loss on the bonds will be reported in the Other Income and Expense section of the 2016 income statement until the entire amount of interest is paid on June 30, 2017.

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