Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

c. Prepare the journal entry made by Plug in 2086 to record its interest income on the Spark bonds that it holds. (If no entry

image text in transcribedimage text in transcribed
c. Prepare the journal entry made by Plug in 2086 to record its interest income on the Spark bonds that it holds. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) X Answer is not complete. No Event General Journal Debit Credit A Cash Interest income d. Prepare the consolidation entry to remove the effects of the Intercorporate bond ownership in completing a three- part consolidation worksheet at December 31, 20X5. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Answer is not complete. No Event Accounts Debit Credit A Bonds payable Loss on bond retirement Investment in Spark Company bonds e. Spark reported net income of $70,000 and $90,000 for 20X5 and 20X6, respectively. Plug reported Income from Its separate operations of $130,000 and $160,000 for 20X5 and 20X6, respectively. What amount of consolidated net income and income to the controlling interest will be reported in the consolidated income statements for 20X5 and 20X6? X Answer is not complete. 20X5 20X6 Consolidated net income Income to controlling interestPlug Corporation purchased $114,000 par value bonds of its subsidiary, Spark Company, on December 31, 20X5, from Lemon Corporation. The 10-year bonds bear a 9 percent coupon rate, and Spark originally sold them on January 1, 20X3, to Lemon. Interest is paid annually on December 31. Plug owns 85 percent of the stock of Spark. In preparing the consolidation worksheet at December 31, 20X6, Plug's controller made the following entry to eliminate the effects of the intercorporate bond ownership: Consolidation Worksheet Entries Debit Credit Bonds Payable 114,000 Interest Income 9, 860 Investment in Spark Company Stock 5,355 NCI in NA of Spark Company 945 Investment in Spark Company Bonds 116,400 Discount on Bonds Payable 3,000 Interest Expense 10,760 Required: With the Information given, answer the following questions: a. What amount did Plug pay when it purchased Spark's bonds? * Answer is not complete. Purchase price b. Prepare the journal entry made by Spark in 20X6 to record Its Interest expense for the year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Answer is not complete. No Event General Journal Debit Credit A Interest expense Cash 30 c. Prepare the Journal entry made by Plug in 20X6 to record its interest income on the Spark bonds that It holds. (If no entry is . select "No joumal entry required" in the first account field. )

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: Davis, Charles E., Elizabeth

1st Edition

0471699608, 978-0471699606

More Books

Students also viewed these Accounting questions

Question

The number of new ideas that emerge

Answered: 1 week ago

Question

Technology

Answered: 1 week ago