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Financial Accounting

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Effect of Held-to-Maturity Investment

FINACT-YNDEYL

HotPot Restaurant had a \$50,000 investment in a 5% bond it purchased at par on January 1, 2015 which was categorized as held-to-maturity investment. The maturity date of the bond is January 1, 2018.

HotPot Restaurant received \$2,500 in interest from the bond issuing company for 2015.

What was the total effect of this investment on the income statement for 2015 (in $)?