Pancake Corporation Owns 85 Percent of Syrup Corporation's Voting Shares

question 35

Multiple Choice

Pancake Corporation owns 85 percent of Syrup Corporation's voting shares.On January 1,20X8,Pancake Corporation sold $200,000 par value 8 percent bonds to Syrup for $245,000.The bonds mature in 10 years and pay interest semiannually on January 1 and July 1.
-Based on the information given above,in the preparation of the 20X8 consolidated financial statements,interest income will be:

• A)debited for $11,500 in the consolidating entries.
• B)credited for $11,500 in the consolidating entries.
• C)debited for $16,000 in the consolidating entries.
• D)credited for $16,000 in the consolidating entries.

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