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please provide the amounts the ones are wrong. E8-7 Constructive Retirement at End of Year (Effective Interest Method) LO 8-2 Suspect Company issued $1,050,000 of
please provide the amounts the ones are wrong.
E8-7 Constructive Retirement at End of Year (Effective Interest Method) LO 8-2 Suspect Company issued $1,050,000 of 8 percent first mortgage bonds on January 1, 20X1, at 101. The bonds mature in 20 years and pay interest semiannually on January 1 and July 1. Prime Corporation purchased $700,000 of Suspect's bonds from the original purchaser on December 31, 20X5, for $694,000. Prime owns 70 percent of Suspect's voting common stock. Required: a. Prepare the worksheet consolidation entry or entries needed to remove the effects of the intercorporate bond ownership in preparing consolidated financial statements for 20X5. (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 A 1 700,000 875 Bonds payable Premium on bonds payable Investment in Suspect Company bonds Gain on bond retirement 694,400 6,875 X B 2 Interest payable Interest receivable 11,200 11,200 compl B 2 Interest payable Interest receivable 11,200 11,200 b. Prepare the worksheet consolidation entry or entries needed to remove the effects of the intercorporate bond ownership in preparing consolidated financial statements for 20X6. (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 not complete. No Event Accounts 1 Debit Credit Bonds payable Premium on bonds payable Interest income Investment in Suspect Company bonds Interest expense 700,000 4,900 56,400 694,800Step by Step Solution
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