can you show the entries that need to be done thank you
01/01/10: SkilletCo, a sub of PotCo, issues $100,000 bonds at a premium, and receives $110,000. Bonds are 5 year; 10%. 12/31/10: SkilletCo pays bond interest for Year 1, and amortizes interest expense and bond premium on the straight line method. 12/31/11: SkilletCo pays bond interest for Year 2, and amortizes interest expense and bond premium on the straight line method. 01/01/12: Market interest rates have climbed, and the value of the bonds are down. PotCo purchases them back for $85,000. At consolidation, bonds are treated as though retired -- as though SkilletCo purchased them back and extinguished the debt. 12/31/12-14: SkilletCo pays interest to PotCo; PotCo amortizes (SL method) the increasing value of their bonds (and interest income). At consolidation, intra-entity transactions/balances eliminated; accumulated consolidated income impact adjusted to R/E. 01/01/15: The bonds mature and SkilletCo pays back the bond face value to the bondholders. 1/1/12 01/01/10 DR CR 12/31/10 DR CR 12/31/11 DR CR 12/31/12 DR CR 12/31/13 DR CR 12/31/14 DR CR 01/01/15 DR CR DR CR POTCO Cash 110000 Investment in Bonds Interest Income MIM 10000 20000 SKILLETCO Cash Bonds Payable Bond Premium Interest Expense 100000 10000 10000 20000 CONSOLIDATION ENTRY Interest Income ---------------------- Interest Expense Gain - Extinguishment of Debt ---------- Equity Investment (Eq Method) Investment in Bonds Bonds Payable Bond Premium ------------ 01/01/10: SkilletCo, a sub of PotCo, issues $100,000 bonds at a premium, and receives $110,000. Bonds are 5 year; 10%. 12/31/10: SkilletCo pays bond interest for Year 1, and amortizes interest expense and bond premium on the straight line method. 12/31/11: SkilletCo pays bond interest for Year 2, and amortizes interest expense and bond premium on the straight line method. 01/01/12: Market interest rates have climbed, and the value of the bonds are down. PotCo purchases them back for $85,000. At consolidation, bonds are treated as though retired -- as though SkilletCo purchased them back and extinguished the debt. 12/31/12-14: SkilletCo pays interest to PotCo; PotCo amortizes (SL method) the increasing value of their bonds (and interest income). At consolidation, intra-entity transactions/balances eliminated; accumulated consolidated income impact adjusted to R/E. 01/01/15: The bonds mature and SkilletCo pays back the bond face value to the bondholders. 1/1/12 01/01/10 DR CR 12/31/10 DR CR 12/31/11 DR CR 12/31/12 DR CR 12/31/13 DR CR 12/31/14 DR CR 01/01/15 DR CR DR CR POTCO Cash 110000 Investment in Bonds Interest Income MIM 10000 20000 SKILLETCO Cash Bonds Payable Bond Premium Interest Expense 100000 10000 10000 20000 CONSOLIDATION ENTRY Interest Income ---------------------- Interest Expense Gain - Extinguishment of Debt ---------- Equity Investment (Eq Method) Investment in Bonds Bonds Payable Bond Premium
