11. Carsen Company purchased $200,000 of 10% bonds of Garrison Co. on January 1, 2016, paying $211,950. The bonds mature January 1, 2026; interest is payable each July 1 and January 1. The discount of...

Extracted text: 11. Carsen Company purchased $200,000 of 10% bonds of Garrison Co. on January 1, 2016, paying $211,950. The bonds mature January 1, 2026; interest is payable each July 1 and January 1. The discount of $11,950 provides an effective yield of 9%. Carsen's objective is to hold the bonds to collect the contractual cash flows. Carsen Company uses the effective interest method. 12. On July 1, 2016, Carsen Company should decrease its Held-for-Collection Debt Investments account for the Garrison Co. bonds by:.