Mojo Corporation Acquires All the Voting Stock of Ninja Company

Mojo Corporation acquires all the voting stock of Ninja Company. Ninja has $1,000,000 in bonds payable, issued at par value, on its books. The bonds have a 5-year remaining life at the date of acquisition, and 4% interest is paid annually. The fair value of the bonds at the date of acquisition is $1,020,000. The premium is straight-line amortized. Which statement is true concerning the consolidation of Mojo with Ninja two years after the acquisition?

A) Consolidated interest expense on the bonds is $44,000
B) Eliminating entry (O) decreases interest expense by $4,000
C) If market interest rates are 4% at the date of consolidation, no entry (O) is needed
D) Eliminating entry (R) increases bonds payable by $20,000