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On January 1,2021, Muscat Company purchased $120,000 of Gulf Company bonds at a premium of...

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Accounting

On January 1,2021, Muscat Company purchased $120,000 of Gulf Company bonds at a premium of $3000. The Gulf bonds pay 9% interest but were purchased when the market interest rate was 7% for bonds of similar risk and maturity. The bonds pay interest semiannually on June 30 and December 31 of each year. Muscat Company accounts for the Company's December 31,2021, journal entry to record the second period of interest, Muscat Company would record a credit to interest revenue of:
Select one:
A. $5313.
B. $5400.
C. $4200.
D. $4267.
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