Peanut Corporation acquired 80 percent of Snoopy Company's voting shares on January 1, 20X8, at underlying book value. On Dec. 31, 20X8, it also purchased $500,000 par value 8 percent Snoopy bonds, which had been issued on January 1, 20X5 to Schulz Corporation (unaffiliated with either Peanut or Snoopy) at a $45,000 premium. The bonds were originally issued with a 12-year maturity and pay interest annually on December 31. During preparation of the consolidated financial statements for December 31, 20X8, the following consolidating entry was included in the consolidation worksheet: Bonds Payable500,000 Bond Premium33,769 Loss on Bond Retirement16,875 Investment in Snoopy Company Bonds 550,644Based on the information given above, what was the carrying amount of the bonds on Snoopy's
books on the date of purchase?
A. $500,000
B. $550,644
C. $516,875
D. $533,769
Answer: D
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