Corporate Bonds

. On October 1, 2014, the Sun Company acquired 9% bonds of Jack’s Company with a face value of $400,000 for $412,000 plus accrued interest. Interest is payable on June 30 and December 31. How would Sun record the initial bond investment to be held-to-maturity?

a. Investment in Held-to-Maturity Debt Securities 412,000

Interest Income 9,360

Cash 421,360

b. Investment in Held-to-Maturity Debt Securities 412,000

Interest Income 9,000

Cash 421,000

c. Investment in Held-to-Maturity Debt Securities 421,000

Cash 421,000

d. Investment in Held-to-Maturity Debt Securities 412,000

Cash 412,000