I need Break downs of how to properly calculate Interest Income and Interest Expense throughout this Problem. I have Highlighted in Red the Correct Numbers, manually entered. Please help me find correct formulas.
4 500,000 6 10 7 Sibling Company issued $500,000 par value, 10-year bonds at 104 on January 1, 20x3, which Mega Corporation purchased. The 104 8 coupon rate on the bonds is 11 percent. Interest payments are made semiannually on July 1 and January 1. On July 1, 20x6, Parent 11% 9 Company purchased $200,000 par value of the bonds from Mega for $192,200. Parent owns 70 percent of Sibling's voting shares. 200,000 192,200 10 70% 11 12 Required: 13 a. What amount of gain or loss will be reported in Sibling's 20x6 income statement on the retirement of bonds? (Leave no cells 14 blank - be certain to enter "O" wherever required.) 3.5 15 16 . No gain or loss 17 18 19 20 b. Will a gain or loss be reported in the 20x6 consolidated financial statements for Parent for the constructive retirement of 21 bonds? What amount will be reported? (Do not round your intermediate calculations. Round your final answer to nearest whole 22 dollar. Leave no cells blank - be certain to enter "O" wherever required. 23 24 Bonds 25 BV of Bonds 6% Payable 26 192,200 192,615 193,054 193,519 27 7/1/20X6 28 1/1/20X7 7,800 200,000 200,000 11000 11415 -415 7,385 29 7/1/20X7 200,000 11000 11439 -439 6,946 30 1/1/20x8 11000 11465 -465 6,481 200,000 31 32 33 . 34 Book value of liability reported by sibling 35 36 200,000 6,056 37 par value of bond outstanding unamortized premium 38 book value of debt 39 206,056 (192,200) amount paid by parent 40 gain on bond retirement 41 13,856 42 43 c. How much will Parent's purchase of the bonds change consolidated 44 net income for 20X6? (Do not round your intermediate calculations. 45 Round your final answer to nearest whole dollar. Leave no cells blank 46 be certain to enter "O" wherever required.) 47 48 C. 49 Consolidated net income for 20X6 50 gain on bond retirement 13,856 51 interest income 52 11,415 interest expense 10,662 53 753 increase in consolidated net income 54 13,103 56 D. 1 Eliminating entries December 31, 20X6 57 58 General Journal Debit Credit 59 Bonds payable Premium on Bonds payable 60 200,000 61 5,718 62 Interest income 11,415 investment in Sibling company bonds 63 192,615 interest expense 64 10,662 13,856 Mathematically Correct Gain on bond retirement 65 66 67 D. 2 Interest receivable/payable 68 69 General Journal Debit Credit 70 interest payable 71 11,000 interest receivable 72 11,000 73 . 1 74 75 Eliminating entries Decmeber 21, 20X7 76 General Journal Debit Credit 77 Bonds payable 200,000 78 Premium on Bonds Payable 4,988 79 Interest income 80 22,905 investment in Sibling bonds 81 193,519 interest expense 82 21,270 investment in Sibling NCI in NA of sibling 83 9,173 84 3,931 227,893.00 Mathematically Correct 227,893.00 85 86 E. 2 87 Interest and receivables 88 General Journal Debit Credit 89 Interest Payable 90 11,000 11,000 91 Interest Receivable 92 93 F. f. If Sibling reports net income of $50,000 for 20x7, what amount of income will be 94 assigned to the noncontrolling interest in the consolidated income statement? (Do not 95 50,000 round your intermediate calculations. Round your final answer to nearest whole dollar. 96 Leave no cells blank - be certain to enter "O" wherever required.) 97 98 99 Net income reported by Sibling 50,000 100 Interest income (22,905) 101 interest expense (1,635) 102 21,270 Realized net income 103 48,365 proportion of ownership 30% 104 income assigned to noncontrolling interest 105 14,510 106 4 500,000 6 10 7 Sibling Company issued $500,000 par value, 10-year bonds at 104 on January 1, 20x3, which Mega Corporation purchased. The 104 8 coupon rate on the bonds is 11 percent. Interest payments are made semiannually on July 1 and January 1. On July 1, 20x6, Parent 11% 9 Company purchased $200,000 par value of the bonds from Mega for $192,200. Parent owns 70 percent of Sibling's voting shares. 200,000 192,200 10 70% 11 12 Required: 13 a. What amount of gain or loss will be reported in Sibling's 20x6 income statement on the retirement of bonds? (Leave no cells 14 blank - be certain to enter "O" wherever required.) 3.5 15 16 . No gain or loss 17 18 19 20 b. Will a gain or loss be reported in the 20x6 consolidated financial statements for Parent for the constructive retirement of 21 bonds? What amount will be reported? (Do not round your intermediate calculations. Round your final answer to nearest whole 22 dollar. Leave no cells blank - be certain to enter "O" wherever required. 23 24 Bonds 25 BV of Bonds 6% Payable 26 192,200 192,615 193,054 193,519 27 7/1/20X6 28 1/1/20X7 7,800 200,000 200,000 11000 11415 -415 7,385 29 7/1/20X7 200,000 11000 11439 -439 6,946 30 1/1/20x8 11000 11465 -465 6,481 200,000 31 32 33 . 34 Book value of liability reported by sibling 35 36 200,000 6,056 37 par value of bond outstanding unamortized premium 38 book value of debt 39 206,056 (192,200) amount paid by parent 40 gain on bond retirement 41 13,856 42 43 c. How much will Parent's purchase of the bonds change consolidated 44 net income for 20X6? (Do not round your intermediate calculations. 45 Round your final answer to nearest whole dollar. Leave no cells blank 46 be certain to enter "O" wherever required.) 47 48 C. 49 Consolidated net income for 20X6 50 gain on bond retirement 13,856 51 interest income 52 11,415 interest expense 10,662 53 753 increase in consolidated net income 54 13,103 56 D. 1 Eliminating entries December 31, 20X6 57 58 General Journal Debit Credit 59 Bonds payable Premium on Bonds payable 60 200,000 61 5,718 62 Interest income 11,415 investment in Sibling company bonds 63 192,615 interest expense 64 10,662 13,856 Mathematically Correct Gain on bond retirement 65 66 67 D. 2 Interest receivable/payable 68 69 General Journal Debit Credit 70 interest payable 71 11,000 interest receivable 72 11,000 73 . 1 74 75 Eliminating entries Decmeber 21, 20X7 76 General Journal Debit Credit 77 Bonds payable 200,000 78 Premium on Bonds Payable 4,988 79 Interest income 80 22,905 investment in Sibling bonds 81 193,519 interest expense 82 21,270 investment in Sibling NCI in NA of sibling 83 9,173 84 3,931 227,893.00 Mathematically Correct 227,893.00 85 86 E. 2 87 Interest and receivables 88 General Journal Debit Credit 89 Interest Payable 90 11,000 11,000 91 Interest Receivable 92 93 F. f. If Sibling reports net income of $50,000 for 20x7, what amount of income will be 94 assigned to the noncontrolling interest in the consolidated income statement? (Do not 95 50,000 round your intermediate calculations. Round your final answer to nearest whole dollar. 96 Leave no cells blank - be certain to enter "O" wherever required.) 97 98 99 Net income reported by Sibling 50,000 100 Interest income (22,905) 101 interest expense (1,635) 102 21,270 Realized net income 103 48,365 proportion of ownership 30% 104 income assigned to noncontrolling interest 105 14,510 106
