Melina purchased a $10,000 corporate bond on july 1, 2018. the bond has a stated interest rate of 5%, payable annually on november 1. since melina purchased the bond between interest payment dates the interest income on schedule b, interest and ordinary dividends will be reported as $251, the amount of interest earned from july 1 through december 31. $332, her proportionate share of the interest as taxable income. no further adjustment is necessary. $500, the full interest payment, then minus $332, the amount of accrued interest, as an adjustment. $500, the entire interest payment. no further adjustment is necessary, as the amount of accrued interest was added to melina's basis at the time of purchase

$500, the full interest payment, then minus $332, the amount of accrued interest, as an adjustment

Explanation:

Given information

Purchase value of corporate bond = $10,000

Stated interest rate = 5%

So, The full annual interest would be

= Purchase value of corporate bond × Stated interest rate

= $10,000 × 5%

= $500

And the corporate bond is purchased on July 1 , and its interest payable annually on November 1

So, the interest for four months would be

= $500 × 4 months ÷ 12 months

= $167

So, the accrued interest would be

= $500 - $167

= $333 approx

This above interest should be deducted

forbearance of student loan payments. under forbearance, your loan payments are postponed (or reduced) but interest continues to accrue during the period of forbearance. if you don't pay the interest during that period, the interest may be “capitalized,” which means it is added to your principal balance.