On july 1 2013 capital corporation should increase its debt, Ask an Expert

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On January 1, 2013, Capital Corporation acquired for $400,000 of 10% bonds, paying $376,100. The bonds mature January 1, 2024; interest is payable each July 1 and January 1. The discount of $23,900 provides an effective yield of 11%. Capital Corporation uses the effective-interest method and plans to hold these bonds to maturity. On July 1, 2013, Capital Corporation should increase its Debt Investments account for these bonds by (round to the nearest dollar):

a) $4,000

b) $3,761

c) $1,195

d) $686

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M945879

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