Response to the following problem:
Analyze and report held-to-maturity investments purchased at a premium
Insurance companies and pension plans hold large quantities of bond investments. Housemann Insurance Corp. purchased $2,600,000 of 10.0% bonds of Sardoan, Inc., for 114 on January 1, 2014. These bonds pay interest on January 1 and July 1 each year. They mature on January 1, 2018. At October 31, 2014, the end of the fiscal year, the market price of the bonds is 105.