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Pfadt Inc.had $600,000 par of 8% bonds payable outstanding on January 1,2013 due January 1,2017 with an unamortized discount of $12,000.Senat is a 90%-owned subsidiary of Pfadt.On January 2,2013,Senat Corporation purchased $150,000 par value of Pfadt's outstanding bonds for $152,000.The bonds have interest payment dates of January 1 and July 1.Straight-line amortization is used.
-Bonds Payable appeared in the December 31,2013 consolidated balance sheet of Pfadt Corporation and Subsidiary in the amount of

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The carrying amount of the bonds on January 1, 2013, is $588,000 ($600,000 - $12,000). Senat purchased $150,000 of these bonds, so the carrying amount of the purchased bonds is $147,000 ($150,000 - $3,000 discount). The purchase price was $152,000, resulting in a $5,000 premium. The premium is amortized over 4 years, resulting in $1,250 amortization per year. The carrying amount of the bonds on December 31, 2013, is $588,000 - $150,000 + $1,250 = $443,250.

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