Peter Corporation Owns a 70% Interest in Sundown Corporation Acquired

question 21

Essay

Peter Corporation owns a 70% interest in Sundown Corporation acquired several years ago at a price equal to book value and fair value.On December 31,2013,Sundown had $300,000 par of 6% bonds outstanding with an unamortized premium of $30,000.The bonds mature in five years and pay interest on January 1 and July 1.On January 2,2014,Peter acquired one-third of Sundown's bonds for $117,000.Peter and Sundown use straight-line amortization.Sundown reports net income of $250,000 for 2014.Peter uses the equity method to account for the investment.
Required:
1.Calculate Peter's income from Sundown for 2014.
2.Calculate the noncontrolling interest share for 2014.

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Definitions:

Benefits

Advantages or positive outcomes that an individual or organization receives from a product, service, or policy.

Prospective Customer

is an individual or organization potentially interested in purchasing a company's products or services, often targeted in marketing efforts.

Physicality

Physicality refers to the physical presence or aspects of something, often highlighting the tangible, sensory qualities.

Education

The systematic instruction, schooling, or training given to individuals to impart knowledge, develop skills, and foster attitudes and behaviors.