Sun Company Is a 100%-Owned Subsidiary of Peter Company

question 7

Multiple Choice

Sun Company is a 100%-owned subsidiary of Peter Company.On January 1, 2016, Sun Company has $500,000 of 8% face rate bonds outstanding, with an unamortized discount of $5,000 that is being amortized over a 5 year remaining life to maturity.On that date, Peter Company purchased the bonds for $497,000.The adjustment to the consolidated income of the two companies needed in the consolidation process for 2017 (the following year) is ____.

• A)​$2,800 increase
• B)​$400 decrease
• C)​$400 increase
• D)​$2,800 decrease

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Definitions:

Wheezing

A high-pitched whistling sound produced during breathing, often resulting from an obstructed airway.

Rhonchi

Low-pitched, rattling lung sounds that suggest blockage or secretion in the large airways, often heard in patients with bronchitis or pneumonia.

Orthopedic Surgeon

A medical specialist who diagnoses, treats, and manages conditions related to the musculoskeletal system, including injuries and diseases of bones, joints, ligaments, tendons, muscles, and nerves.

Bowed Legs

A condition characterized by a noticeable bending outward of the legs from the knee down, which can lead to walking difficulties.