Amount to record as cost of debt


On July 1, 2013, Wilshire Corporation acquired 500, $1,000, 8% bonds at 96 plus accrued interest. The bonds were dated April 1, 2013, and mature on March 31, 2018, with interest paid each September 30 and March 31. The bonds will be added to Wilshire's available-for-sale portfolio. The amount to record as the cost of this debt investment on July 1, 2013 is:

a) $490,000

b) $485,000

c) $480,000

d) $540,000

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Accounting Basics: Amount to record as cost of debt
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