FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Consolidation
Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading struc…
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The Jones Company owns 80% of the stock of the Ace Company. On January 1, 2023, Jones purchased $20,000 (face value) of Ace's bonds in the open market. These bonds had an 8% cash interest rate. On the date of acquisition, the liability was recorded at $21,386 by the Ace Company, indicating an effective interest rate of 6%. Jones paid $18,732 for the bonds, indicating an effective interest rate of 10%. Required: Prepare journal entry B that would be prepared on the consolidating worksheet for the consolidation of the Jones and Ace Companies for the year ended December 31, 2023.
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Transcribed Image Text:The Jones Company owns 80% of the stock of the Ace Company. On January 1, 2023, Jones purchased $20,000 (face value) of Ace's bonds in the open market. These bonds had an 8% cash interest rate. On the date of acquisition, the liability was recorded at $21,386 by the Ace Company, indicating an effective interest rate of 6%. Jones paid $18,732 for the bonds, indicating an effective interest rate of 10%. Required: Prepare journal entry B that would be prepared on the consolidating worksheet for the consolidation of the Jones and Ace Companies for the year ended December 31, 2023.
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