Question
On December 31, 2019 a subsidiary issues to its parent company a $100,000 face amount 5 year 10% bond. The proceeds received by the subsidiary
On December 31, 2019 a subsidiary issues to its parent company a $100,000 face amount 5 year 10% bond. The proceeds received by the subsidiary equal $98,000. Interest is payable annually.
- Prepare the entries made by the subsidiary and the parent to record the issuance of the bond on December 31, 2019, and interest for the year 2020. Use the straight line amortization method for the bond discount/premium.
- Prepare consolidation entries for 2020.
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Advanced Accounting
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
10th edition
0-07-794127-6, 978-0-07-79412, 978-0077431808
