Question
On January 1, 2021, Jay Company acquired all the outstanding ownership shares of Zee Company. In assessing Zees acquisition-date fair values, Jay concluded that the
On January 1, 2021, Jay Company acquired all the outstanding ownership shares of Zee Company. In assessing Zees acquisition-date fair values, Jay concluded that the carrying value of Zees long-term debt (8-year remaining life) was less than its fair value by $24,000. At December 31, 2021, Zee Companys accounts show interest expense of $14,350 and long-term debt of $410,000. What amounts of interest expense and long-term debt should appear on the December 31, 2021, consolidated financial statements of Jay and its subsidiary Zee?
| Interest expense | Long-term debt | |
| a. | $17,350 | $434,000 |
| b. | $17,350 | $431,000 |
| c. | $11,350 | $434,000 |
| d. | $11,350 | $431,000 |
Multiple Choice
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Option A
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Option B
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Option C
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Option D
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