Pancake Corporation Owns 85 Percent of Syrup Corporation's Voting Shares

Multiple Choice

Pancake Corporation owns 85 percent of Syrup Corporation's voting shares.On January 1,20X8,Pancake Corporation sold $200,000 par value 8 percent bonds to Syrup for $245,000.The bonds mature in 10 years and pay interest semiannually on January 1 and July 1.
-Based on the information given above,in the preparation of the 20X8 consolidated financial statements,premium on bonds payable will be:

A) debited for $45,000 in the consolidating entries.
B) credited for $40,500 in the consolidating entries.
C) debited for $40,500 in the consolidating entries.
D) credited for $45,000 in the consolidating entries.