Paper Corporation holds 80 percent of the voting shares of Scissor Company. On January 1, 20X8, Scissor purchased $100,000 par value 12 percent Paper bonds from Cruse Corporation for $115,000. Paper originally issued the bonds to Cruse on January 1, 20X6, for $110,000. The bonds have an 8-year maturity from the date of issue and pay interest semiannually on June 30 and December 31 each year. Scissor' reported net income of $65,000 for 20X8, and Paper reported income (excluding income from ownership of Scissor's stock) of $90,000. Paper's partial bond amortization schedule is as follows:PMT# Interest$ PMTInterestExpense Amort ofDiscount(Premium)Premium(Discount)BondsPayableBV
ofBonds 1/1/20X6 10,000.00 100,000.00 110,000.00 1 6/30/20X6 6,000.00 5,579.78 (420.22) 9,579.78 100,000.00 109,579.78 2 12/31/20X6 6,000.00 5,558.47 (441.53) 9,138.25 100,000.00 109,138.25 3 6/30/20X7 6,000.00 5,536.07 (463.93) 8,674.33 100,000.00 108,674.33 4 12/31/20X7 6,000.00 5,512.54 (487.46) 8,186.86 100,000.00 108,186.86 5 6/30/20X8 6,000.00 5,487.81 (512.19) 7,674.68 100,000.00 107,674.68 6 12/31/20X8 6,000.00 5,461.83 (538.17) 7,136.51 100,000.00 107,136.51 Based on the information given above, what amount of interest income does Scissor record on its individual books for 20X8?
A. $8,002
B. $9,410
C. $10,002
D. $10,950
Answer: C
You might also like to view...
Answer the following statements true (T) or false (F)
1. Free cash flow is calculated by adding cash payments planned for investments in long-term assets and cash dividends to the amount of net cash provided by operating activities. 2. Investors who want to know the amount of cash a company has available for new opportunities, such as expanding into a new sales region, should analyze the company's free cash flow. 3. Free cash flow is the amount of cash available from operating activities before paying for planned investments in long-term assets. 4. Many companies use free cash flow to estimate the amount of cash that would be available for unexpected opportunities.
The advantage of cobranding for a small OEM is that:
a. it enhances its ability to differentiate its products from competitors b. it lends credibility to its product c. it is expensive d. it avoids conflict with large OEMs e. it is not advantageous for small OEMs to cobrand
Because spoken communication is more difficult to process than written communication, complex, lengthy sentences that are acceptable for written documents are NOT effective in a presentation
Indicate whether the statement is true or false
Which one of the following actions applies to a level strategy?
A) Hire workers to increase production output to match increases in demand requirements. B) Build anticipation inventory to meet the variability in demand. C) Decrease production output to match any decreases in demand requirements. D) Use promotional campaigns to boost demand.