financial instruments_amortized cost method

hello mr.chris
thres this question in the notes that you made a lecture on but i just cant wrap my head around something,just in case you can’ quite recall, here’s the question :

Norman bought 10,000 debentures at a 2% discount on the par value of $100. The debentures are
redeemable in four years’ time at a premium of 5%. The coupon rate attached to the debentures is 4%.
The effective rate of interest on the debenture is 5.73%

ok now in recording journals for year 1 you said:
DR investment 56,154
CR interest receivable 56,154(spl)
&
DR bank 40k
CR investment 40k

here’s my 2 problems with that:

1-sice the interest receivable is recorded in the spl it increases our profits for the year but there isn’t actually any profit received!(besides that 40k that we credited to the investment account cuz it reduced the amount that the debt issuer has to give us) and the 56,154 is actually made up of 2 numbers our 40k and the 16,154 of that 5% maturity interest(that will add up to 70k in the 4th year) SO it seems like the 16,154 is somehow like a provision(than an actual profit) for the 70k that we receive plus the whole 160k thats 4yr*40k so why do we even record it in spl? does it not overstate the profits that would be received in the 4th year? like we are literally overstating profits each year as to create a provision to achieve at the 70k but the 4th year is actually when that profit is received!

2-why would we even bother with the effective interest rate? why not just say OK we’ll ultimately receive 70k in the 4th year lets just go ahead and say 70k/4yr=17.5k and record that as an income?

OK?(yes i am copying your style 😀 )

thanks