On January 1 2013 Phantom Company acquires 302500 of Spiderm

On January 1, 2013, Phantom Company acquires $302,500 of Spiderman Products, Inc., 8% bonds at a price of $287,455. The interest is payable each December 31, and the bonds mature December 31, 2015. The investment will provide Phantom Company a 10.00% yield. The bonds are classified as held-to-maturity.

(a)

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

Date

Cash
Received

Interest
Revenue

Bond Discount
Amortization

Carrying Amount
of Bonds

$\"\"$

Bond discount= 302500-287455=15045

Amortisation per year = 15045/3 =5015

Interest received = 302500*.08=24200

Schedule of Interest Revenue and Bond Discount Amortization Straight-line Method Bond Purchased to Yield
Date	cash received	Interest revenue	Bond Discount Amortization	Carrying Amount of Bonds
1/1/13				287,455
12/31/13	24200	24200+5015=29215	5015	287455+5015=292470
12/31/14	24200	29215	5015	292470+5015=297485
12/31/15	24200	29215	5015	297485+5015= 302500

On January 1, 2013, Phantom Company acquires $302,500 of Spiderman Products, Inc., 8% bonds at a price of $287,455. The interest is payable each December 31, an

On January 1 2013 Phantom Company acquires 302500 of Spiderm

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