On March 1, 2015, Uncontracted Capacity Company (UCC) Purchased $20,000

question 71

Multiple Choice

On March 1, 2015, Uncontracted Capacity Company (UCC) purchased $20,000 of Utility Service Corporation's 9% bonds at a purchase price of 90. Uncontracted Capacity Company, whose year end is December 31, expects to hold the bonds until their maturity date 5 years from the date of purchase. Interest on the bonds will be paid every March 1 and September 1 until maturity. Assuming that UCC is a private corporation that elects to amortize premium or discounts using straight-line amortization, how much total interest revenue will be recorded by UCC on September 1, 2015?

• A) $800
• B) $1,100
• C) $900
• D) $1,200

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