Puget Corporation owns 80 percent of Sound Company's voting shares. On January 1, 20X7, Sound sold bonds with a par value of $300,000 when the market rate was 7 percent. Puget purchased two thirds of the bonds; the remainder was sold to nonaffiliates. The bonds mature in ten years and pay an annual interest rate of 6 percent. Interest is paid semiannually on June 30 and Dec 31.Based on the information given above, what amount of interest expense will be eliminated in the preparation of the 20X8 consolidated financial statements?
A. $13,023
B. $8,682
C. $8,730
D. $13,096
Answer: D
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A company acquires 1,000 shares of its own $1 par common stock for $15 per share. This purchase would be recorded with a:
A. Debit to Treasury Stock for $15,000 B. Debit to Additional Paid-In Capital for $14,000 C. Credit to Treasury Stock for $15,000 D. Credit to Treasury Stock for $1,000
The first budget to be prepared for a professional services firm should be the:
a. Direct expense budget. b. Labor budget. c. Overhead budget. d. Revenue budget.
Lincoln Company engaged in this transaction: Retired long-term debt with cash. Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows
A) Operating activities section. B) Does not represent a cash flow. C) Investing activities section. D) Financing activities section.
Which of the following statements is correct?
a. Capital stock of a foreign subsidiary is translated at the historical rate, that is, the rate prevailing on the date the subsidiary was acquired. b. Dividends are translated at the average exchange rate for the year. c. Retained earnings are translated at the average exchange rate for the year. d. Assets and liabilities are translated at the historical rate prevailing when the subsidiary was acquired.