Pan Corporation owns 65 percent of Sauce Corporation's voting shares. On January 1, 20X3, Pan Corporation sold $300,000 par value 7 percent bonds to Sauce when the market interest rate was 4 percent. The bonds mature in 15 years and pay interest semiannually on June 30 and December 31.Based on the information given above, what amount of investment in bonds will be eliminated in the preparation of the 20X3 consolidated financial statements?
A. $400,784
B. $300,000
C. $395,766
D. $257,248
Answer: C
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