Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Pretzel Corporation owns 60 percent of Stick Corporation's voting shares. On January 1, 20X2, Pretzel Corporation sold $185,000 par value, 8 percent first mortgage bonds

image text in transcribed

image text in transcribed

image text in transcribed

Pretzel Corporation owns 60 percent of Stick Corporation's voting shares. On January 1, 20X2, Pretzel Corporation sold $185,000 par value, 8 percent first mortgage bonds to Stick for $191,000. The bonds mature in 10 years and pay interest semiannually on January 1 and July 1. Required: a. Prepare the journal entries for 20X2 for Stick related to its ownership of Pretzel's 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.) ook rint View transaction list rences 1 Record the investment in the bonds of Pretzel Corporation. > 2. Record the semiannual interest income received from the bonds of Pretzel Corporation. i 3 Record the semiannual interest receivable from the bonds of Pretzel Corporation. Credit b. Prepare the journal entries for 20X2 for Pretzel related to the 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.) View transaction list X 1 Record the investment in Pretzel Corporation bonds by Stick Corporation. > 2. ion. Record the payment of interest and the amortization of the bond premium. 3 Record the interest payable and the amortization of bond premium Credit Note : journal entry has been entered Record entry Clear entry View general journal c. Prepare the worksheet consolidation entries needed on December 31, 20X2, to remove the effects of the intercorporate ownership of 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.) view transaction list + X -S A Record the entry to eliminate the intercompany bond holdings. > B Record the entry to eliminate intercompany receivable/payable. h Credit Note : journal entry has been entered

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions

Question

1-4 How will MIS help my career?

Answered: 1 week ago