Pants Corporation acquired 75 percent of Shirt Company's voting shares on January 1, 20X7, at underlying book value. On December 31, 20X7, it also purchased $300,000 par value 9 percent Shirt bonds, which had been issued on January 1, 20X3 to Parry Corporation (unaffiliated with either Pants or Shirt) at a $20,000 premium. The bonds were originally issued with a 10-year maturity and pay interest annually on December 31. During preparation of the consolidated financial statements for December 31, 20X7, the following consolidation entry was included in the consolidation worksheet: Bonds Payable300,000 Bond Premium11,902 Loss on Bond Retirement12,098 Investment in Shirt Company Bonds 324,000Based on the information given above, what price did Pants pay to purchase the Shirt bonds?
A. $311,902
B. $300,000
C. $324,000
D. $312,098
Answer: C
Business
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