Company P Owns 80% of Company S

question 7

Multiple Choice

Company P owns 80% of Company S. On January 1, 20X3 Company S has outstanding 6% bonds with a face value of $200,000 and an unamortized discount of $3,000, which is being amortized on a straight-line basis over a remaining term of 10 years. On January 1, 20X3, Company P purchased all the bonds for $205,000. The premium also is amortized on a straight-line basis. The net impact of the purchase on the noncontrolling interest as of December 31, 20X3, is ____.

• A)$(8,000)
• B)$(1,600)
• C)$(1,440)
• D)$(1,200)

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