Pepper Enterprises owns 95 percent of Salt Corporation On January 1, 20X1, Salt issued $250,000 of five year bonds at 115 Annual interest of 12 percent is paid semiannually on January 1 and July 1 Pepper purchased $150,000 of the bonds on Aug 31, 20X3, at par value The following balances are taken from the separate 20X3 financial statements of the two companies Required a Compute the amount of interest expense that should be reported in the consolidated income statement for 20X3 b Compute the gain or loss on constructive bond retirement that should be reported in the 20X3 consolidated income statement c Prepare the consolidation worksheet consolidation entry or entries as of December 31, 20X3, to remove the effects of the intercorporate bond ownership

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Pepper Enterprises owns 95 percent of Salt Corporation  On January 1, 20X1, Salt issued $250,000 of five year bonds at 115  Annual interest of 12 percent is paid semiannually on January 1 and July 1  Pepper purchased $150,000 of the bonds on Aug 31, 20X3, at par value  The following balances are taken from the separate 20X3 financial statements of the two companies  Required  a  Compute the amount of interest expense that should be reported in the consolidated income statement for 20X3  b  Compute the gain or loss on constructive bond retirement that should be reported in the 20X3 consolidated income statement  c  Prepare the consolidation worksheet consolidation entry or entries as of December 31, 20X3, to remove the effects of the intercorporate bond ownership

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Pepper Enterprises owns 95 percent of Salt Corporation. On January 1, 20X1, Salt issued $250,000 of five-year bonds at 115. Annual interest of 12 percent

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