Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Plug Corporation purchased $100,000 par value bonds of its subsidiary, Spark Company, on December 31, 20X5, from Lemon Corporation for $102,800. The 10-year bonds bear
Plug Corporation purchased $100,000 par value bonds of its subsidiary, Spark Company, on December 31, 20X5, from Lemon Corporation for $102,800. The 10-year bonds bear a 9 percent coupon rate, and Spark originally sold them on January 1, 20X3, to Lemon at 95. Interest is paid annually on December 31. Plug owns 85 percent of the stock of Spark. In preparing the consolidation worksheet at December 31, 20X6, Plug's controller made the following entry to eliminate the effects of the Intercorporate bond ownership: Consolidation Worksheet Entries Debit Credit Bonds Payable 100,eee Interest Income 8,691 Retained Earnings, January 1 5,741 Noncontrolling Interest 1,013 Investment in Spark Company Bonds 102,491 Discount on Bonds Payable 3,535 Interest Expense 9,419 b. Prepare the consolidation entry to remove the effects of the Intercorporate bond ownership in completing a three-part consolidation worksheet at December 31, 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 not complete. No Event Accounts Debit Credit . 1 100,000 Bonds payable Loss on bond retirement Investment in Spark Company bonds Discount on bonds payable 102,800 c. Spark reported net income of $60,000 and $80,000 for 20x5 and 20X6, respectively. Plug reported Income from its separate operations of $120,000 and $150,000 for 20x5 and 20x6, respectively. What amount of consolidated net Income and income to the controlling Interest will be reported in the consolidated Income statements for 20x5 and 20X6? (Do not round your Intermediate calculations. Round your final answers to nearest whole dollar.) Answer is not complete. 20X5 20X6 Consolidated net income Income to controlling interest
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started