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What amounts of interest expense appear on statements

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Problem - On January 1, 2018, Jay Company acquired all the outstanding ownership shares of Zee Company. In assessing Zee's acquisition-date fair values, Jay concluded that the carrying value of Zee's long-term debt (8-year remaining life) was less than its fair value by $31,200. At December 31, 2018, Zee Company's accounts show interest expense of $13,000 and long-term debt of $500,000. 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.

$16,900

$531,200

b.

$16,900

$527,300

c.

$9,100

$531,200

d.

$9,100

$527,300

Reference no: EM132781377

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