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Exercise 5-9 On January 1, 2013, Point Corporation acquired an 80% interest in Sharp Company for $1,992,000. At that time Sharp Company had common stock
Exercise 5-9 On January 1, 2013, Point Corporation acquired an 80% interest in Sharp Company for $1,992,000. At that time Sharp Company had common stock of $1,504,000 and retained earnings of $704,000. The book values of Sharp Company's assets and liabilities were equal to their fair values except for land and bonds payable. The land had a fair value of $100,000 and a book value of $81,000. The outstanding bonds were issued at par value on January 1, 2008, pay 9% annually, and mature on January 1, 2018, The bond principal is $505,000 and the current yield rate on similar bonds is 7%
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