# On July 1, 2017, Wheeler Company purchased \$4,000,000of Duggen Company’s 8% bonds, due on July 1, 2024.The bonds, which pay interest semiannually on January1 and July 1, were purchased for \$3,500,000 to yield 10%.Determine the amount of interest revenue Wheelershould report on its income statement for the year endedDecember 31, 2017.

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On July 1, 2017, Wheeler Company purchased \$4,000,000
of Duggen Company’s 8% bonds, due on July 1, 2024.
The bonds, which pay interest semiannually on January
1 and July 1, were purchased for \$3,500,000 to yield 10%.
Determine the amount of interest revenue Wheeler
should report on its income statement for the year ended
December 31, 2017.

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Step 1

Formula to calculate interest revenue:

Interest revenue = Purchas...

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