Use the Following Information to Answer the Question(s)below

question 36

Multiple Choice

Use the following information to answer the question(s) below.
Pascalian Company owns a 90% interest in Sapp Company.On January 1,2010,Pascalian had $300,000,6% bonds outstanding with an unamortized premium of $9,000.The bonds mature on December 31,2014.Sapp acquired one-third of Pascalian's bonds in the open market for $97,000 on January 1,2010.Both companies use straight-line amortization of bond discounts/premiums.Interest is paid on December 31.On December 31,2010,the books of the two affiliates held the following balances:

-Consolidated Interest Expense and consolidated Interest Income,respectively,that appeared on the consolidated income statement for the year ended December 31,2010 was

• A)$10,800 and $0.
• B)$10,800 and $6,600.
• C)$0 and $0.
• D)$16,200 and $6,600.

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