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Please provide Step by step on how to come up with the answers I am still missing JL entries Purse Corporation owns 70 percent of
Please provide Step by step on how to come up with the answers I am still missing JL entries
Purse Corporation owns 70 percent of Scarf Company's voting shares. On January 1, 20X3, Scarf sold bonds with a par value of $697,500 at 98. Purse purchased $465.000 par value of the bonds the remainder was sold to nonaffiliates. The bonds mature in five years and pay an annual Interest rate of 8 percent. Interest is paid semiannually on January 1 and July 1. Required: a. What amount of Interest expense should be reported in the 20x4 consolidated Income statement? (Do not round your Intermediate calculations. Round your final answer to nearest whole dollar.) Answer is complete but not entirely correct. Interest expense $ 37,200 b. Prepare the journal entries Purse recorded during 20x4 with regard to its Investment in Scarf bonds. (If no entry is required for a transaction/event, select "No Journal entry required" in the first account field. Do not round your intermediate calculations. Round your final answers to nearest whole dollar.) Answer is complete but not entirely correct. Credit No 1 Date General Journal January 1, 20X4 Cash Interest receivable Debit 18,600 olo 18,600 2 July 1, 20X4 Cash Investment in Scarf Company bonds Interest income OOO 18,600 465 19,065 3 December 31, 20% interest receivable Investment in Scarf Company bonds Interest income ol 18,800 920 % OOO 19,530 X c. Prepare all worksheet consolidation entries needed to remove the effects of the Intercorporate bond ownership in preparing consolidated financial statements for 20x4. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations. Round your final answers to nearest whole dollar.) No Debit Credit Event 1 . Answer is not complete. Accounts Bonds payable Interest income Investment in Scarf Company bonds Bond discount Interest expense 485,000 18,600 OOO 232,500 $ B 2 18,600 IS Interest payable interest receivable E 18,800Step by Step Solution
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