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

question 25

Multiple Choice

Use the following information to answer the question(s) below.

Plenty Corporation issued six thousand, $1,000 par, 6% bonds on January 1, 2012, at par. Interest is paid on January 1 and July 1 of each year; the bonds mature on January 1, 2017. On January 2, 2014, Scrawn Corporation, a 75%-owned subsidiary of Plenty, purchased 3,000 of the bonds on the open market at 102.50. Plenty's separate net income for 2014 included the annual interest expense for all 3,000 bonds. Scrawn's separate net income for 2014 was $400,000, which included the bond interest received on July 1 as well as the accrual of bond interest revenue earned on December 31. Both companies use straight-line amortization of bond discounts/premiums.

-Using the original information,the amount of consolidated Interest Expense for 2014 was

• A)$ 135,000.
• B)$ 180,000.
• C)$ 270,000.
• D)$ 360,000.

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Definitions:

Anticodons

Sequences of three nucleotides in a transfer RNA molecule that are complementary to a specific codon in messenger RNA.

Codons

Sequences of three nucleotides in mRNA that specify a particular amino acid or a start/stop signal during protein synthesis.

Eukaryotic Cells

Complex cells with a nucleus and other organelles enclosed within membranes.

Cytoplasm

Region of a cell between the nucleus, or the nucleoid region of a bacterium, and the plasma membrane; contains the organelles of the cell.