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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.

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.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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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