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Cairns owns 75 percent of the voting stock of Hamilton, Inc. The parent's interest was acquired several years ago on the date that the subsidiary was formed. Consequently, no goodwill or other allocation was recorded in connection with the acquisition. Cairns uses the equity method in its internal records to account for its investment in Hamilton. On January 1, 2014, Hamilton sold $1,700,000 in 10-year bonds to the public at 105. The bonds had a cash interest rate of 10 percent payable every December 31. Cairns acquired 35 percent of these bonds at 96 percent of face value on January 1, 2016. Both companies utilize the straight-line method of amortization. Prepare the consolidation worksheet entries to recognize the effects of the intra-entity bonds at each of the following dates. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) a. December 31, 2016 b. December 31, 2017 c. December 31, 2018 Answer is not complete. No Debit Credit 1 595,000 20,825 Date Accounts December 31, 201 Bonds payable Premium on bonds payable Interest income Investment in bonds Interest expense Gain on retirement of bonds 547,175 44,625 X 47,600 2 December 31, 201 Bonds payable Premium on bonds payable Interest income Investment in bonds 595,000 17,850 20,825 577.150 No Date Accounts Debit Credit 1 595,000 20,825 December 31, 201 Bonds payable Premium on bonds payable Interest income Investment in bonds Interest expense Gain on retirement of bonds 547,175 44,625 47,600 2 December 31, 201Bonds payable Premium on bonds payable Interest income Investment in bonds Interest expense Investment in Hamilton 595,000 17,850 20,825 577.150 44,625 71,400 3 December 31, 201 Bonds payable Premium on bonds payable Interest income Investment in bonds Interest expense Investment in Hamilton 595,000 14,875 20,825 580,125 44,625 95,200 Albuquerque, Inc., acquired 18,000 shares of Marmon Company several years ago for $630,000. At the acquisition date, Marmon reported a book value of $600,000, and Albuquerque assessed the fair value of the noncontrolling interest at $70,000. Any excess of acquisition-date fair value over book value was assigned to broadcast licenses with indefinite lives. Since the acquisition date and until this point, Marmon has issued no additional shares. No impairment has been recognized for the broadcast licenses. At the present time, Marmon reports $630,000 as total stockholders' equity, which is broken down as follows: Common stock ($10 par value) Additional paid-in capital Retained earnings Total $ 200,000 260,000 170,000 '$ 630,000 View the following as independent skuations: a. & b. Marmon sells 10,000 and 4,000 shares of previously unissued common stock to the public for $40 and $30 per share. Albuquerque purchased none of this stock. What journal entry should Albuquerque make to recognize the impact of this stock transaction? (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.) Answer is not complete. No Transaction 1 1 General Journal Investment in Marmon Additional paid-in capital Debit Credit 2 2 Additional paid in capital Investment in Marmon
