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(LO3) Paka Corporation owns an 80% interest in Sandra Company. Paka acquired Sandra's bonds on January 2, 2014. The following information is from the adjusted
(LO3) Paka Corporation owns an 80% interest in Sandra Company. Paka acquired Sandra's bonds on January 2, 2014. The following information is from the adjusted trial balances at December 31, 2014, at which time the bonds have three years to maturity. The bonds have interest payment dates of January 1 and July 1. Straight-line amortization is used by both companies.
Required: Prepare the necessary consolidation working paper entries on December 31, 2014 with respect to the intercompany bonds
Sandra Paka Investment in Sandra Bonds, $100,000 par 98,500 7% Bonds payable, $200,000 Bond premium Interest expense Interest receivable 7,000 Interest income 7,500 Interest payable 200,000 6,000 12,000 7,000Step by Step Solution
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