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Parker Company owns 90% of the outstanding common stock of Stagger Company.On January 1, 2014, Stagger Company issued $500,000, 12%, ten-year bonds.
On January 1, 2013, Parker Company paid $315,000 for Stagger Company bonds with a par value of $300,000 and a carrying value of $297,600.Both companies use the straight-line method to amortize bond premiums and discounts.Parker Company accounts for the investment using the cost method of accounting.
-Parker Company would report a balance in the Investment in Stagger Company Bonds account on December 31, 2013, of

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Use the following information to answer Questions 
Parker Company owns 90% of the outstanding common stock of Stagger Company.On January 1, 2014, Stagger Company issued $500,000, 12%, ten-year bonds.
On January 1, 2013, Parker Company paid $315,000 for Stagger Company bonds with a par value of $300,000 and a carrying value of $297,600.Both companies use the straight-line method to amortize bond premiums and discounts.Parker Company accounts for the investment using the cost method of accounting.
-Parker Company would report a balance in the Investment in Stagger Company Bonds account on December 31, 2013, of

Quizplus · Accepted Answer

The investment is initially recorded at cost, $315,000. The premium of $15,000 ($315,000 - $300,000) is amortized over the bond's life. For one year, the amortization is $1,875 ($15,000/8 years), so the balance on December 31, 2013, is $313,125 ($315,000 - $1,875).

Use the Following Information to Answer Questions