Question 6
10 points
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S Company is a 90% owned subsidiary of P Company. On January 1, 2013, S Company purchased for $680,000 bonds of P Company
that had a carrying value of $724,000 (par value $700,000). The bonds mature on December 31, 2014. Both companies use the
straight-line method of amortization and have a December 31 year-end. The increase in 2013 consolidated income (i.e., income
before subtracting noncontrolling interest) is
A. $54,000.
B. $45,000.
C. $36,000.
D. $44,000.
E. $46,000.