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

question 24

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 balances for the Bonds Payable and Bond Interest Payable accounts,respectively,on the consolidated balance sheet for December 31,2015 were

• A)$3,000,000 and $ 90,000.
• B)$3,000,000 and $180,000.
• C)$6,000,000 and $ 90,000.
• D)$6,000,000 and $180,000.

---

Definitions:

Days

Units of time equivalent to 24 hours, representing the approximate period it takes for the Earth to complete one rotation on its axis.

Sleep

A naturally occurring condition of the mind and body where consciousness is altered, sensory activities are largely reduced, and almost all voluntary muscles are inhibited.

Circadian Rhythms

Biological processes that display an endogenous, entrainable oscillation of about 24 hours, affecting various physiological processes in living organisms.

Melatonin

A hormone produced by the pineal gland that regulates sleep and wakefulness.