Problem
On January 1, Year 1, Gibson Corporation purchased bonds issued by Williamson Company. These bonds were classified as? held-to-maturity securities. The face value of these bonds is? $200,000, pay? 8% interest and were purchased to yield? 6%. The bonds mature in 10 years and pay interest on an annual basis. If Gibson Corporation paid? $229,439 for these? bonds, how much interest revenue should it report on the bonds at December? 31, Year? 1? Assume that Gibson used the effective interest method.