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- Parilo Company acquired 170,000 of Makofske Co., 5% bonds on May 1, 2016, at their face amount. Interest is paid semiannually on May 1 and November 1. On November 1, 2016, Parilo Company sold 50,000 of the bonds for 96. Journalize entries to record the following: a. The initial acquisition of the bonds on May 1. b. The semiannual interest received on November 1. c. The sale of the bonds on November 1. d. The accrual of 1,000 interest on December 31, 2016.Consolidation adjustment necessary when affiliate's debt is acquired from non-affiliate Assume that a Parent company owns 65 percent of its Subsidiary. The parent company uses the equity method to account for its Equity investment. On January 1, 2015, the Parent company issued to an unaffiliated company $2,000,000 (face) 10 year, 10 percent bonds payable for a $100,000 premium. The bonds pay interest on December 31 of each year. On January 1, 2018, the Subsidiary acquired 30 percent of the bonds for $572,000. Both companies use straight-line amortization. In preparing the consolidated financial statements for the year ended December 31, 2019, what consolidating entry adjustment is necessary for the beginning-of-year Equity investment balance? $Answer Answer CreditComplete the following partial worksheet for Pat Inc. and Slinger Company for the year acquisition of intercompany bonds 2013. Pat In. and Subsidiary Slinger Company Partial Consolidated Worksheet For Year Ended December 31, 2013 Trial Balance Eliminations and Adjustments Pat Slinger Dr Cr. Interest receivable 8,000 Investment in Slinger bonds 100,898 Interest payable (8,000) Bonds payable (100,000) Premium on bonds payable (448) Interest income* Interest expense* *To be entered Eliminations and Adjustments: (B1) Eliminate the intercompany bonds and the applicable interest and revenue and expense. Record the gain or loss on retirement. (B2) Eliminate the intercompany interest payable…
- Midyear purchase of subsidiary’s bonds Sanur Corporation is a 90 percent subsidiary of Pare Corporation. On January 1, 2016, Sanur issued $1,000,000 par, 10 percent 5-year bonds with an unamortized premium of $50,000. On July 1, 2016, Pare Corporation purchased $400,000 par of the outstanding bonds of Sanur for $390,000. Straight-line amortization is used. REQUIRED: Calculate the following: 1. The gain or loss on constructive retirement of the bonds 2. The consolidated bond interest expense for 2016 3. The consolidated bond liability at December 31, 2016Effects on consolidated financial statements of acquisition of affiliate's debt from non-affiliate On January 1, 2022, a Parent company has a debt outstanding that was originally issued at a discount and was purchased, on issuance, by an unaffiliated party. On January 1, 2022, a Subsidiary of the Parent purchased the debt from the unaffiliated party. The debt was purchased by the Subsidiary at a slight premium. The Parent is a calendar year company. Which one of the following statements is true? The consolidated balance sheet at December 31, 2022 will report none of the debt, and the consolidated income statement for the year ended December 31, 2022 will report a gain or loss from constructive retirement of the debt and will not report any interest expense from the debt. The consolidated balance sheet at December 31, 2022 will report the debt, and the consolidated income statement for the year ended December 31, 2022 will not report any interest expense from the debt. The consolidated…Satum Corporation issued $300,000 par value 10-year bonds at 107 on January 1, 20X3, which Star Corporation purchased On July 1, 20X7, Pluto Corporation purchased $120,000 face value of Saturn bonds from Star. The bonds pay 12 percent interest annually on December 31 The preparation of consolidated financial statements for Saturn and Pluto at December 31, 20X9, required the following consolidation entry Prentum on Bonds Payable Interest Income Investment in Saturn Corporation Bonds Interest Expense Investment in Saturn Corporation Stock MCI in Net Assets of Saturn Corporation 120,000 2,520 14,760 118,920 13,560 3,120 1,680 on the information given above, what percentage of the subsidiary's ownership does the parent company hold?
- Suspect Company Issued $720,000 of 8 percent first mortgage bonds on January 1, 20X1, at 105. The bonds mature in 20 years and pay interest semiannually on January 1 and July 1. Prime Corporation purchased $480,000 of Suspect's bonds from the original purchaser on January 1, 20X5, for $473,000. Prime owns 60 percent of Suspect's voting common stock. Required: a. Prepare the worksheet consolidation entry or entries needed to remove the effects of the Intercorporate bond ownership In preparing consolidated financial statements for 20X5. b. Prepare the worksheet consolidation entry or entries needed to remove the effects of the Intercorporate bond ownership In preparing consolidated financial statements for 20X6. Answer is not complete. Complete this question by entering your answers in the tabs below. Required A Required B Prepare the worksheet consolidation entry or entries needed to remove the effects of the intercorporate bond ownership in preparing consolidated financial statements…Suspect Company Issued $600,000 of 9 percent first mortgage bonds on January 1, 20X1, at 103. The bonds mature in 20 years and pay Interest semiannually on January 1 and July 1. Prime Corporation purchased $400,000 of Suspect's bonds from the original purchaser on December 31, 20X5, for $397,000. Prime owns 60 percent of Suspect's voting common stock. Required: a. Prepare the worksheet consolidation entry or entries needed to remove the effects of the Intercorporate bond ownership In preparing consolidated financial statements for 20X5. (If no entry is required for a transaction/event, select "No Journal entry required" In the first account fleld. Do not round your intermediate calculations. Round your final answers to nearest whole dollar.) No A B No A Event 1 B 2 Event 1 2 Bonds payable Premium on bonds payable Investment in Suspect Company bonds Gain on bond retirement Interest payable Answer is complete but not entirely correct. Accounts Interest receivable b. Prepare the worksheet…Suspect Company Issued $600,000 of 9 percent first mortgage bonds on January 1, 20X1, at 103. The bonds mature in 20 years and pay Interest semiannually on January 1 and July 1. Prime Corporation purchased $400,000 of Suspect's bonds from the original purchaser on December 31, 20X5, for $397,000. Prime owns 60 percent of Suspect's voting common stock. Required: a. Prepare the worksheet consolidation entry or entries needed to remove the effects of the Intercorporate bond ownership In preparing consolidated financial statements for 20X5. (If no entry is required for a transaction/event, select "No journal entry required" In the first account field. Do not round your Intermediate calculations. Round your final answers to nearest whole dollar.) Answer is complete but not entirely correct. No Event A 1 Bonds payable Premium on bonds payable Accounts Investment in Suspect Company bonds Gain on bond retirement B 2 Interest payable Interest receivable Debit Credit 400,000 9,000 397,000 9,000…
- Gonzalez Company acquired $177,000 of Walker Co., 8% bonds on May 1 at their face amount. Interest is paid semiannually on May 1 and November 1. On November 1, Gonzalez Company sold $45,600 of the bonds for 97. Journalize entries to record the following in Year 1: For a compound transaction, if an amount box does not require an entry, leave it blank. a. The initial acquisition of the bonds on May 1. May 1 Investments-Walker Co. Bonds Cash Feedback a. Record the investment at par and the cash paid. b. The semiannual interest received on November 1. Nov. 1 Cash Interest RevenueGonzalez Company acquired $210,000 of Walker Co., 5% bonds on May 1 at their face amount. Interest is paid semiannually on May 1 and November 1. On November 1, Gonzalez Company sold $44,400 of the bonds for 95. Journalize entries to record the following in Year 1: For a compound transaction, if an amount box does not require an entry, leave it blank. a. The initial acquisition of the bonds on May 1. May 1 fill in the blank 2db398fc5fbefe9_2 fill in the blank 2db398fc5fbefe9_4 b. The semiannual interest received on November 1. Nov. 1 fill in the blank 12a681fdb06bff7_2 fill in the blank 12a681fdb06bff7_4 c. The sale of the bonds on November 1. Nov. 1 fill in the blank cee7ff00dfa3fc5_2 fill in the blank cee7ff00dfa3fc5_3 fill in the blank cee7ff00dfa3fc5_5 fill in the blank cee7ff00dfa3fc5_6 fill in the blank cee7ff00dfa3fc5_8 fill in the blank cee7ff00dfa3fc5_9 d. The accrual of $1,380…On 12/31/2020, a parent company purchased the bonds of its subsidiary from the bondholders of the subsidiary for $102,000 cash. The carrying value of the bonds on the general ledger of the subsidiary was $107,000. What amounts will appear on the parent's consolidated balance sheet for 2020? Investment Bonds A) In Bonds Payable $0 $0 Investment Bonds B) In Bonds Payable $102,000 $0 Investment Bonds In Bonds Payable $107,000 $102,000 Investment Bonds D) In Bonds Payable $102,000 $107,000 Investment Bonds E) In Bonds Payable $0 $107,000