Paper Corporation holds 80 percent of the voting shares of Scissor Company.On January 1,20X8,Scissor purchased $100,000 par value 12 percent Paper bonds from Cruse Corporation for $115,000.Paper originally issued the bonds to Cruse on January 1,20X6,for $110,000.The bonds have an 8-year maturity from the date of issue and pay interest semiannually on June 30 and December 31 each year.Scissor' reported net income of $65,000 for 20X8,and Paper reported income (excluding income from ownership of Scissor's stock)of $90,000.Paper's partial bond amortization schedule is as follows:

-Based on the information given above,what amount of interest income does Scissor record on its individual books for 20X8?

Question

Paper Corporation holds 80 percent of the voting shares of Scissor Company.On January 1,20X8,Scissor purchased $100,000 par value 12 percent Paper bonds from Cruse Corporation for $115,000.Paper originally issued the bonds to Cruse on January 1,20X6,for $110,000.The bonds have an 8-year maturity from the date of issue and pay interest semiannually on June 30 and December 31 each year.Scissor' reported net income of $65,000 for 20X8,and Paper reported income (excluding income from ownership of Scissor's stock)of $90,000.Paper's partial bond amortization schedule is as follows:
 
-Based on the information given above,what amount of interest income does Scissor record on its individual books for 20X8?

Quizplus · Accepted Answer

The correct calculation for interest income involves identifying the appropriate interest rate and applying it to the principal amount over the time specified. Without specific details from the question, the correct answer is based on standard accounting principles for recording interest income, which involves accruing interest earned over the period in question. Given the options, the answer provided is based on the assumption that D) $10,002 is the result of such a calculation.

Paper Corporation Holds 80 Percent of the Voting Shares of Scissor