On January 1, 2012, Morgan Company acquires $350,500 of Nicklaus, Inc., 9% bonds

Question

On January 1, 2012, Morgan Company acquires $350,500 of Nicklaus, Inc., 9% bonds at a price of $333,370. The interest is payable each December 31, and the bonds mature December 31, 2014. The investment will provide Morgan Company a 11.00% yield. The bonds are classified as held-to-maturity.
(a) Prepare a 3-year schedule of interest revenue and bond discount amortization, applying the straight-line method. (Round answers to 0 decimal places, e.g. 2,500.)

Schedule of Interest Revenue and Bond Discount Amortization
Straight-line Method
Bond Purchased to Yield

Date Cash Interest Bond Discount Carrying Amount
Received Revenue Amortization of Bonds
1/1/12 $
12/31/12 $ $ $
12/31/13
12/31/14

Explanation / Answer

12/31/13

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