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On January 1, 2018, Jay Company acquired all the outstanding ownership shares of Zee Company....

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Accounting

On January 1, 2018, 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 $29,600. At December 31, 2018, Zee Companys accounts show interest expense of $13,440 and long-term debt of $480,000. What amounts of interest expense and long-term debt should appear on the December 31, 2018, consolidated financial statements of Jay and its subsidiary Zee?

Interest expense Long-term debt
a. $17,140 $509,600
b. $17,140 $505,900
c. $9,740 $509,600
d. $9,740 $505,900

Multiple Choice

  • Option A

  • Option B

  • Option C

  • Option D

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