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answer incorrect Cairns owns 80 percent of the voting stock of Hamilton, Inc. The parent's interest was acquired several years ago on the date that
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Cairns owns 80 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, 2017, Hamilton sold $2,400,000 in 10-year bonds to the public at 105. The bonds had a cash interest rate of 8 percent payable every December 31. Cairns acquired 40 percent of these bonds at 96 percent of face value on January 1, 2019. 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, 2019 b. December 31, 2020 c. December 31, 2021 Answer is complete but not entirely correct. h Credit No Date Accounts December 31, 201 Bonds payable Debit 960,000 81,600 33,000 76.000 72.000 926,400 1 Premium on bonds payable Interest income Investment in bonds Interest expense Gain on retirement of bonds- 100000 Activate Windows Go to Settings to amuste No 1 2 3 Answer is complete but not entirely correct. Accounts Debit 960,000 81,600 X 33,600 X Date December 31, 201 Bonds payable December 31, 202 Bonds payable December 31, 202 Bonds payable Premium on bonds payable Interest income Investment in bonds Interest expense Gain on retirement of bonds Premium on bonds payable Interest income Investment in bonds Interest expense Investment in Hamilton Premium on bonds payable interest income Investment in bonds Interest expense Investment in Hamilton 303330 000000 000000 960,000 81,600 28,800 x 960,000 81,600 x 24,000 X Credit 76,800 X 72,000 926.400 x 67,200 72,000 931,200 57,600 72,000 936,000 *** Activate Step by Step Solution
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