S Company issued $1,000,000 par value 10 year bonds at 102 on January 1, 20X5, which M Corporation purchased The coupon rate on the bonds is 9 percent Interest payments are made semiannually on July 1 and January 1 On Jan 1, 20X8, P Company purchased $500,000 par value of the bonds from M for $492,200 P owns 65 percent of Ss voting shares Required What amount of gain or loss will be reported in S's 20X8 income statement on the retirement of bonds Will a gain or loss be reported in the 20X8 consolidated financial statements for P for the constructive retirement of bonds What amount will be reported How much will P's purchase of the bonds change consolidated net income for 20X8 Prepare the worksheet consolidating entry or entries needed to remove the effects of the intercorporate bond ownership in preparing consolidated financial statements at December 31, 20X8 Prepare the worksheet consolidating entry or entries needed to remove the effects of the intercorporate bond ownership in preparing consolidated financial statements at December 31, 20X9 Use Excel formulas to make or evidence each of your calculations of all dollar amounts Do not enter any dollar amounts directly, unless it is unavoidable for obvious reasons Use the tab function at the bottom of the Excel file to complete the assignment

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S Company issued $1,000,000 par value 10-year bonds at 102 on January 1, 20X5, which M Corporation purchased. The coupon rate on the bonds is

S Company issued $1,000,000 par value 10-year bonds at 102 on January 1, 20X5, which M Corporation purchased. The coupon rate on the bonds is 9 percent. Interest payments are made semiannually on July 1 and January 1. On Jan 1, 20X8, P Company purchased $500,000 par value of the bonds from M for $492,200. P owns 65 percent of Ss voting shares.

Required:

What amount of gain or loss will be reported in S's 20X8 income statement on the retirement of bonds?
Will a gain or loss be reported in the 20X8 consolidated financial statements for P for the constructive retirement of bonds? What amount will be reported?
How much will P's purchase of the bonds change consolidated net income for 20X8?
Prepare the worksheet consolidating entry or entries needed to remove the effects of the intercorporate bond ownership in preparing consolidated financial statements at December 31, 20X8.
Prepare the worksheet consolidating entry or entries needed to remove the effects of the intercorporate bond ownership in preparing consolidated financial statements at December 31, 20X9.

Use Excel formulas to make or evidence each of your calculations of all dollar amounts. Do not enter any dollar amounts directly, unless it is unavoidable for obvious reasons. Use the tab function at the bottom of the Excel file to complete the assignment.