Hunter Corporation holds 80 percent of the voting shares of Moss Company. On January 1, 20X8, Moss purchased $100,000 par value 12 percent first mortgage bonds of Hunter from Cruse for $115,000. Hunter 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. Moss' reported net income of $65,000 for 20X8, and Hunter reported income (excluding income from ownership of Moss's stock) of $90,000.
-Based on the information given above,what amount of interest income does Moss record for 20X8?
A) $12,000
B) $2,500
C) $7,500
D) $9,500

Question

Quizplus · Accepted Answer

The Answer of Hunter Corporation holds 80 percent of the voting shares of Moss Company. On January 1, 20X8, Moss purchased $100,000 par value 12 percent first mortgage bonds of Hunter from Cruse for $115,000. Hunter 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. Moss' reported net income of $65,000 for 20X8, and Hunter reported income (excluding income from ownership of Moss's stock) of $90,000.
-Based on the information given above,what amount of interest income does Moss record for 20X8?
A) $12,000
B) $2,500
C) $7,500
D) $9,500

Hunter Corporation Holds 80 Percent of the Voting Shares of Moss