Cairns owns 75 of the voting stock of hamilton inc the

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Cairns owns 75% of the voting stock of Hamilton, Inc. The parent's interest was acquired several years ago on the date that the subsidiary was formed. Consequently, no goodwill or other allocation was recorded in connection with the acquisition. Cairns uses the equity method in its internal records to account for its investment in Hamilton.

On Jan 1, 2010, Hamilton sold $1,000,000 in 10-year bonds to the public at 105. The bonds had a cash interest rate of 9% payable every December 31. Cairns acquired 40% of these bonds at 96% face value on Jan 1, 2012. Both companies utilize the straight-line method of amortization.

Reference no: EM13574163

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