Saturn Corporation issued $300,000 par value 10-year bonds at 107 on January 1,20X3,which Star Corporation purchased.On July 1,20X7,Pluto Corporation purchased $120,000 face value of Saturn bonds from Star.The bonds pay 12 percent interest annually on December 31.The preparation of consolidated financial statements for Saturn and Pluto at December 31,20X9,required the following consolidation entry:

-Based on the information given above,what amount did Pluto pay when it purchased the bonds on July 1,20X7?
A)$118,020
B)$118,920
C)$118,620
D)$117,220

Question

Saturn Corporation issued $300,000 par value 10-year bonds at 107 on January 1,20X3,which Star Corporation purchased.On July 1,20X7,Pluto Corporation purchased $120,000 face value of Saturn bonds from Star.The bonds pay 12 percent interest annually on December 31.The preparation of consolidated financial statements for Saturn and Pluto at December 31,20X9,required the following consolidation entry:
 
-Based on the information given above,what amount did Pluto pay when it purchased the bonds on July 1,20X7?
A)$118,020 
B)$118,920 
C)$118,620 
D)$117,220

Quizplus · Accepted Answer

The correct amount Pluto paid when it purchased the bonds is $118,020. This is based on the information provided, which indicates that this is the correct purchase price.

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