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2 Several years ago Brant, Inc., sold $960,000 in bonds to the public. Annual cash interest of 9 percent ($86,400) was to be paid
2 Several years ago Brant, Inc., sold $960,000 in bonds to the public. Annual cash interest of 9 percent ($86,400) was to be paid on this debt. The bonds were issued at a discount to yield 12 percent. At the beginning of 2019, Zack Corporation (a wholly owned subsidiary of Brant) purchased $120,000 of these bonds on the open market for $141.000, a price based on an effective interest rate of 7 percent. The bond liability had a carrying amount on that date of $820,000. Assume Brant uses the equity method to account internally for its investment in Zack. a. & b. What consolidation entry would be required for these bonds on December 31, 2019 and December 31, 2021? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate calculations and final answers to nearest whole number.) Answer is complete but not entirely correct. No Date 1 December 31, 201Bonds payable Accounts Interest income Loss on retirement of debt Interest expense Investment in bonds December 31, 202 Bonds payable Interest income Investment in Zack Investment in bonds Interest expense 00000 Debit Credit 102,800 9.870 38,500 138,870 12,300 97,750 9,735 38,500 134,152 11,759
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