Use the Following Information to Answer the Question(s) Below $$\begin{array} { l l } \text { Investment in Pascalian bonds } & \$ 97,600 \\\text { Interst income } & 6,600\end{array}$$

question 31

Multiple Choice

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

Pascalian Company owns a 90% interest in Sapp Company. On January 1, 2013, Pascalian had $300,000, 6% bonds outstanding with an unamortized premium of $9,000. The bonds mature on December 31, 2017. Sapp acquired one-third of Pascalian's bonds in the open market for $97,000 on January 1, 2013. Both companies use straight-line amortization of bond discounts/premiums. Interest is paid on December 31. On December 31, 2013, the books of the two affiliates held the following balances:
$$\begin{array} { l l } 6 \% \text { bonds payable } & \$ 300,000 \\\text { Premium on bonds } & 7,200 \\\text { Interest expense } & 16,200\end{array}$$ $$\begin{array} { l l } \text { Investment in Pascalian bonds } & \$ 97,600 \\\text { Interst income } & 6,600\end{array}$$
-Bonds Payable appeared in the December 31,2013 consolidated balance sheet of Pfadt Corporation and Subsidiary in the amount of

• A)$398,925.
• B)$443,500.
• C)$441,000.
• D)$450,000.

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Definitions:

Market Quantity

The total amount of goods or services available for purchase within a specific market.

Consumer Surplus

The divergence in total potential expenditure consumers are ready to make on a good or service against actual expenses incurred.

Welfare Economics

A branch of economics that focuses on the optimal allocation of resources and goods and aims to evaluate social welfare.

Equilibrium Price

The cost point where the amount of a product or service sought by consumers matches the amount available from producers.