Peanut Corporation acquired 80 percent of Snoopy Company's voting shares on January 1, 20X8, at underlying book value. On that date, it also purchased $500,000 par value 8 percent Snoopy bonds, which had been issued on January 1, 20X5, with a 12-year maturity. During preparation of the consolidated financial statements for December 31, 20X8, the following consolidating entry was made in the worksheet: Bonds Payable500,000 Bond Premium30,000 Loss on Bond Retirement16,875 Interest Income? Investment in Snoopy Company Bonds 545,000 Interest Expense ? Based on the information given above, what was the carrying amount of the bonds on Snoopy's books on the date of purchase?
A. $533,750
B. $545,000
C. $516,875
D. $550,625
Answer: A
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