Hunter Corporation Holds 80 Percent Of The Voting Shares Of Moss Company On Janu

Hunter Corporation holds 80 percent of the voting shares of Moss Company. On January 1, 2008, Moss purchased $100,000 par value 12 percent first mortgage bonds of Hunter from Cruse for $115,000. Hunter originally issued the bonds to Cruse on January 1, 2006, for $110,000. The bonds have a 8-year maturity from the date of issue. Moss’ reported net income of $65,000 for 2008, and Hunter reported income (excluding income from ownership of Moss’s stock) of $90,000.Based on the information given above, what gain or loss on the retirement of bonds should be reported in the 2008 consolidated income statement? A. $6,250 gainB. $7,500 gainC. $7,500 lossD. $6,250 lossThe answer is C. i would like to konw, how to get C. Thanks.

Question:Hunter Corporation holds 80 percent of the voting shares of Moss Company. On January 1,2008, Moss purchased $100,000 par value 12 percent first mortgage bonds of Hunter fromCruse for…

 

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