Powell Company Owns an 80% Interest in Sauter, Inc

question 13

Multiple Choice

Powell Company owns an 80% interest in Sauter, Inc.On January 1, 2016, Sauter issued $400,000 of 10-year, 12% bonds at a premium of $50,000.On December 31, 2021, 5 years after original issuance, Powell purchased all of the outstanding bonds for $390,000.Both firms use the straight-line method of amortization. ​
The interest adjustment in the 2021 subsidiary income distribution schedule is ____.

• A)​$2,000
• B)​$5,000
• C)​$4,500
• D)​$0

Identify cognitive-behavioral techniques and their applications to treat specific disorders.

Recognize different cognitive distortions and understand their impact on mental health.

Understand the role and effectiveness of modeling and reinforcement in learning behaviors.

Recognize the importance of rational thinking in mental health and how therapy can alter irrational beliefs.

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Definitions:

Income Bonds

Bonds that pay interest only when the issuer has sufficient earnings, providing a variable income stream based on the issuer's profitability.

Yield to Maturity

The total return anticipated on a bond if it is held until the date it matures, reflecting interest and price appreciation.

Par Value

The face value of a bond or stock, representing the amount that will be returned to the investor at maturity or the nominal value of a share.

Capital Gains Yield

The percentage change in the price of an investment over a specified period, not accounting for dividends or other earnings.