Advanced Financial Accounting
12th Edition
ISBN: 9781259916977
Author: Christensen, Theodore E., COTTRELL, David M., Budd, Cassy
Publisher: Mcgraw-hill Education,
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Chapter 8, Problem 8.9E
To determine
Introduction: When a constrictive retirement takes place, the consolidated income statement for the year shows the profit or loss on retirement, but not reported in the consolidated
The consolidation entries needed at December 31, 20X8.
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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…
Chapter 8 Solutions
Advanced Financial Accounting
Ch. 8 - Prob. 8.1QCh. 8 - What is meant by a constructive bond retirement in...Ch. 8 - Prob. 8.3QCh. 8 - Prob. 8.4QCh. 8 - When a parent company sells land to a subsidiary...Ch. 8 - Prob. 8.7QCh. 8 - Prob. 8.8QCh. 8 - Prob. 8.9QCh. 8 - Prob. 8.10QCh. 8 - Prob. 8.11Q
Ch. 8 - How is the amount of income assigned to the...Ch. 8 - Prob. 8.13QCh. 8 - How would the relationship between interest income...Ch. 8 - Prob. 8.15QCh. 8 - Prob. 8.16QCh. 8 - Prob. 8.17QCh. 8 - Prob. 8.18QCh. 8 - Prob. 8.1CCh. 8 - Prob. 8.2CCh. 8 - Prob. 8.4CCh. 8 - Prob. 8.1ECh. 8 - Bond Sale from Parent to Subsidiary (StraightLine...Ch. 8 - Computation of Transfer Price (Effective Interest...Ch. 8 - Prob. 8.2AECh. 8 - Prob. 8.3ECh. 8 - Bond Sale at Discount (Straightline Method) Assume...Ch. 8 - Evaluation of Intercorporate Bond Holdings...Ch. 8 - Prob. 8.5.1ECh. 8 - Prob. 8.5.2ECh. 8 - MultipleChoice Questions (Effective Interest...Ch. 8 - Prob. 8.5.4ECh. 8 - Prob. 8.5.5ECh. 8 - Prob. 8.5.6ECh. 8 - Prob. 8.5.1AECh. 8 - Prob. 8.5.2AECh. 8 - Prob. 8.5.3AECh. 8 - Prob. 8.5.4AECh. 8 - Prob. 8.6.1ECh. 8 - Prob. 8.6.2ECh. 8 - MultipleChoice Questions (Effective Interest...Ch. 8 - Prob. 8.6.1AECh. 8 - Prob. 8.6.2AECh. 8 - Prob. 8.6.3AECh. 8 - Prob. 8.7ECh. 8 - Prob. 8.7AECh. 8 - Prob. 8.8ECh. 8 - Prob. 8.8AECh. 8 - Prob. 8.9ECh. 8 - Prob. 8.9AECh. 8 - Prob. 8.10ECh. 8 - Prob. 8.10AECh. 8 - Prob. 8.11ECh. 8 - Prob. 8.11AECh. 8 - Evaluation of Bond Retirement (Effective Interest...Ch. 8 - Prob. 8.12AECh. 8 - Prob. 8.13ECh. 8 - Prob. 8.13AECh. 8 - Prob. 8.14PCh. 8 - Prob. 8.14APCh. 8 - Prob. 8.15PCh. 8 - Prob. 8.15APCh. 8 - Prob. 8.16PCh. 8 - Prob. 8.16APCh. 8 - Prob. 8.17PCh. 8 - Prob. 8.17APCh. 8 - Prob. 8.18PCh. 8 - Prob. 8.18APCh. 8 - Prob. 8.19APCh. 8 - Prob. 8.20PCh. 8 - Prob. 8.20APCh. 8 - Prob. 8.21PCh. 8 - Prob. 8.21APCh. 8 - Prob. 8.22APCh. 8 - Prob. 8.22BPCh. 8 - Prob. 8.23PCh. 8 - Prob. 8.23APCh. 8 - Prob. 8.24PCh. 8 - Prob. 8.24APCh. 8 - Intercorporate Inventory and Debt Transfers...Ch. 8 - Intercorporate Inventory and Debt Transfers...Ch. 8 - Prob. 8.26PCh. 8 - Prob. 8.26APCh. 8 - Prob. 8.27.1BPCh. 8 - Prob. 8.27.2BPCh. 8 - Prob. 8.27.3BPCh. 8 - Prob. 8.27.4BPCh. 8 - Prob. 8.27.5BPCh. 8 - Prob. 8.27.6BPCh. 8 - Prob. 8.27.7BPCh. 8 - Prob. 8.27.8BPCh. 8 - Prob. 8.27.9BPCh. 8 - Prob. 8.27.10BPCh. 8 - Prob. 8.28PCh. 8 - Prob. 8.28APCh. 8 - Prob. 8.29BPCh. 8 - Prob. 8.30BP
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