Use the Following Information to Answer Questions

question 37

Multiple Choice

Use the following information to answer Questions
Pallet Corporation owns 90% of the outstanding common stock of Stealth Company.On January 1, 2011, Stealth Company issued $500,000, 12%, ten-year bonds.
On January 1, 2013, Pallet Corporation paid $412,000 for Stealth Company bonds with a par value of $400,000 and a carrying value of $393,600.Both companies use the straight-line method to amortize bond premiums and discounts.Pallet Corporation accounts for the investment using the cost method of accounting.
-Pallet Corporation would report a balance in the Investment in Stealth Company Bonds account on December 31, 2013, of

• A)$412,000.
• B)$393,600.
• C)$410,500.
• D)$400,000.
• E)none of these.

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Definitions:

Notochord

A flexible rod-like structure that provides support in all embryonic and some adult chordate animals.

Amniotic Egg

An egg with a protective amniotic membrane, enabling the embryo to develop outside the mother's body, characteristic of reptiles, birds, and certain mammals.

Homo Habilis

An extinct species of early human that lived approximately 2.1 to 1.5 million years ago, known for using stone tools.

First Tools

Early human-made objects, such as stone tools, used to perform various tasks and represent a significant advancement in human evolutionary history.