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please provide the amounts the ones are marked wrong E8-3 Bond Sale at Discount (Effective Interest Method) LO 8-2 Purse Corporation owns 70 percent of
please provide the amounts the ones are marked wrong
E8-3 Bond Sale at Discount (Effective Interest Method) LO 8-2 Purse Corporation owns 70 percent of Scarf Company's voting shares. On January 1, 20X3, Scarf sold bonds with a par value of $645,000 at 98. Purse purchased $430,000 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 $ 18,060 X 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. No Date General Journal Debit Credit 1 January 1, 20X4 Cash 17,200 Interest receivable 17,200 2 July 1, 20X4 Cash 17,200 860 Investment in Scarf Company bonds Interest income 18,060 3 17,200 December 31, 20% Cash Investment in Scarf Company bonds 860 Interest income 18,060 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.) Answer is complete but not entirely correct. No Event Accounts Debit Credit 1 Bonds payable Interest income 430,000 34,400 Investment in Scarf Company bonds Bond discount 424,840 5,160 34,400 Interest expense B 2 Interest payable 17,200 Interest receivable 17,200Step by Step Solution
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