At January 1, Seacoast Company, an 80% - owned subsidiary of Plantation Corporation, had $1 million face amount of 14% bonds outstanding. They had been issued at face amount. Market conditions at January 1 provided a 10% yield rate when Plantation purchased these bonds in the open market for $1.1 million. Which of the following amounts should be included in a consolidated income statement for the year? A. Bond interest expense of $140,000. B. Bond interest revenue of $110,000. C. Loss of $100,000. D. Loss of $80,000.
At January 1, Seacoast Company, an 80% - owned subsidiary of Plantation Corporation, had $1 million face amount of 14% bonds outstanding. They had been issued at face amount. Market conditions at January 1 provided a 10% yield rate when Plantation purchased these bonds in the open market for $1.1 million. Which of the following amounts should be included in a consolidated income statement for the year? A. Bond interest expense of $140,000. B. Bond interest revenue of $110,000. C. Loss of $100,000. D. Loss of $80,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:At January 1, Seacoast Company, an 80% - owned subsidiary of Plantation Corporation, had $1
million face amount of 14% bonds outstanding. They had been issued at face amount. Market
conditions at January 1 provided a 10% yield rate when Plantation purchased these bonds in
the open market for $1.1 million. Which of the following amounts should be included in a
consolidated income statement for the year? A. Bond interest expense of $140,000. B. Bond
interest revenue of $110,000. C. Loss of $100,000. D. Loss of $80,000.
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