On January 1, 2014, Macie Company Purchased Jefferson Company's 9

question 1

Multiple Choice

On January 1, 2014, Macie Company purchased Jefferson Company's 9% bonds with a face amount of $200,000 for $213,420 to yield 8%. The bonds mature on January 1, 2024, and Macie has both the intent and ability to hold these bonds to maturity. The bonds pay interest annually on December 31. Assuming Macie uses the effective interest method of amortizing the bond premium; interest income reported on the December 31, 2014, balance sheet would be

• A) $16,000
• B) $17,074
• C) $18,000
• D) $18,926

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