Philadelphia Company (parent) owns 80% of the common stock of Seattle Company (subsidiary). On January1st, 2015, Seattle Company issued $200,000 of 10-year 6% bonds at face value. Interest is payable on January 1st each year. On January 2nd, 2016, Philadelphia Company purchased 100% of these bonds from outsider bondholders for $209,000.

What entry does Philadelphia record in its individual books to record interest on bonds for 2016?

Debit Interest Receivable $12,000, Credit Investment in Seattles Bonds $1,000, Credit Interest Income $11,000.

May someone explain the credit side? To reach 12,000 its 200,000*6%=12,000 correct?