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I need help where you see the red dots with the x in them. In response to the comment: No market interest rate provided, I
I need help where you see the red dots with the "x" in them.
In response to the comment: No market interest rate provided, I posted the entire question.
Stallion Corporation sold $120,000 par value, 10-year first mortgage bonds to Pony Corporation on January 1, 20X5. The bonds, which bear a nominal interest rate of 8 percent, pay interest semiannually on January 1 and July 1. The entry to record interest income by Pony Corporation on December 31, 20X7, was as follows: Note: Assume using straight-line amortization of bond discount or premium. Credit Debit 4,800 General Journal Interest Receivable Interest Income Investment in Stallion Corporation Bonds 4,560 240 Pony Corporation owns 65 percent of the voting stock of Stallion Corporation, and consolidated statements are prepared on December 31, 20x7. Required: a. What was the original purchase price of the bonds to Pony Corporation? Answer is complete and correct. Original purchase price $ 124,800 b. What is the balance in Pony's bond investment account on December 31, 20X7? * Answer is complete but not entirely correct. Bond investment account $ 0% c. Prepare the worksheet elimination entry or entries needed to remove the effects of the intercompany ownership of bonds in preparing consolidated financial statements for 20X7. (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 Credit Debit 120,000 0 Accounts Bonds payable Bond premium Interest income Interest expense Investment in Stallion Corporation bonds OOO 0 % 0 4,800 Interest payable Interest receivable 00 4,800Step by Step Solution
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