Paper Corporation Holds 80 Percent of the Voting Shares of Scissor

question 2

Multiple Choice

Paper Corporation holds 80 percent of the voting shares of Scissor Company.On January 1,20X8,Scissor purchased $100,000 par value 12 percent first mortgage bonds of Paper from Cruse for $115,000.Paper originally issued the bonds to Cruse on January 1,20X6,for $110,000.The bonds have an 8-year maturity from the date of issue.Scissor's reported net income of $65,000 for 20X8,and Paper reported income (excluding income from ownership of Scissor's stock) of $90,000.
-Based on the information given above,what amount of interest income does Scissor record for 20X8?

• A)$12,000
• B)$2,500
• C)$7,500
• D)$9,500

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Definitions:

Interest-Based Bargaining

A negotiation strategy that focuses on collaboratively identifying underlying needs or interests to find mutually beneficial solutions.

Adversarial Bargaining

A negotiation process where parties have opposing interests and negotiate to reach a compromise.

Traditional Bargaining

The conventional process of negotiation between unions and employers focused primarily on wages, hours, and other basic working conditions.

Direct Dealing

An approach where employers and employees negotiate employment terms without the mediation of a labor union, emphasizing direct interaction and agreement.