(Answered) Question - on july 1 2011 houston company purchased as a

Accounting

Question - On July 1, 2011, Houston Company purchased as a long-term investment Essex Company's ten-year, 9 percent bonds, with a face value of $100,000 for $95,200. Interest is payable semiannually on January 1 and July 1. The bonds mature on July 1, 2015. Houston uses the straight-line method of amortization. What is the amount of interest revenue that Houston should report in its income statement for the year ended December 31, 2011?

A) $3,900

B) $4,500

C) $5,100

D) $5,700

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