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need correct amounts Several years ago Brant, Inc., sold $960,000 in bonds to the public. Annual cash interest of 7 percent ($67,200) was to be
need correct amounts
Several years ago Brant, Inc., sold $960,000 in bonds to the public. Annual cash interest of 7 percent ($67,200) was to be paid on this debt. The bonds were issued at a discount to yield 10 percent. At the beginning of 2019, Zack Corporation (a wholly owned subsidiary of Brant) purchased $120,000 of these bonds on the open market for $141,000, a price based on an effective interest rate of 5 percent. The bond liability had a carrying amount on that date of $820,000. Assume Brant uses the equity method to account internally for its investment in Zack. a. & b. What consolidation entry would be required for these bonds on December 31, 2019 and December 31, 2021? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate calculations and final answers to nearest whole number.) Answer is complete but not entirely correct. No Date Accounts Debit Credit December 31, 201Bonds payable 104,350 Interest income 7,050 Loss on retirement of debt 38,500 Investment in bonds 139,650 Interest expense 10,250 December 31, 202 Bonds payable 108,624 8,390 Interest income Investment in Zack 31,848 138,233 10.639 1 2 Investment in bonds Interest expense 10000 10000 Step by Step Solution
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