Moon Corporation issued $300,000 par value 10-year bonds at 107 on January 1, 20X3, which Star Corporation purchased. On July 1, 20X7, Sun Corporation purchased $120,000 face value of Moon bonds from Star. The bonds pay 12 percent interest annually on December 31. The preparation of consolidated financial statements for Moon and Sun at December 31, 20X9, required the following eliminating entry: Based on the information given above, what amount of gain or loss on bond retirement is included in the 20X7 consolidated income statement?
A) $6,600
B) $4,800
C) $6,000
D) $5,400

Question

Moon Corporation issued $300,000 par value 10-year bonds at 107 on January 1, 20X3, which Star Corporation purchased. On July 1, 20X7, Sun Corporation purchased $120,000 face value of Moon bonds from Star. The bonds pay 12 percent interest annually on December 31. The preparation of consolidated financial statements for Moon and Sun at December 31, 20X9, required the following eliminating entry:  Based on the information given above, what amount of gain or loss on bond retirement is included in the 20X7 consolidated income statement?
A) $6,600 
B) $4,800 
C) $6,000 
D) $5,400

Quizplus · Accepted Answer

The Answer of Moon Corporation issued $300,000 par value 10-year bonds at 107 on January 1, 20X3, which Star Corporation purchased. On July 1, 20X7, Sun Corporation purchased $120,000 face value of Moon bonds from Star. The bonds pay 12 percent interest annually on December 31. The preparation of consolidated financial statements for Moon and Sun at December 31, 20X9, required the following eliminating entry:  Based on the information given above, what amount of gain or loss on bond retirement is included in the 20X7 consolidated income statement?
A) $6,600 
B) $4,800 
C) $6,000 
D) $5,400

Moon Corporation Issued $300,000 Par Value 10-Year Bonds at 107