Spice Company Issued $200,000 of 10 Percent First Mortgage Bonds

question 13

Multiple Choice

Spice Company issued $200,000 of 10 percent first mortgage bonds on January 1,20X4,at 105.The bonds mature in 10 years and pay interest semiannually on January 1 and July 1.Pumpkin Corporation purchased $140,000 of Spice's bonds from the original purchaser on December 31,20X8,for $125,000.Pumpkin owns 75 percent of Spice's voting common stock.
-Based on the information given above,what amount of gain or loss on bond retirement will be reported in the 20X8 consolidated financial statements?

• A)$17,000 loss
• B)$12,800 loss
• C)$18,500 gain
• D)$22,200 gain

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Definitions:

Attitude-Behavior Consistency

The extent to which an individual's beliefs, feelings, and attitudes are aligned with their actual behaviors.

Anti-Chinese Prejudice

Refers to negative attitudes, beliefs, or discrimination against people of Chinese descent or origin.

LaPiere

Refers to a classic study by sociologist Richard LaPiere in the early 20th century that highlighted the discrepancy between attitudes and behaviors, specifically regarding prejudice.

Attitude-Behavior Consistency

Refers to the extent to which individuals’ attitudes (beliefs and feelings) predict their behavior.