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Suspect Company issued $900.000 of 9 percent first mortgage bonds on January 1 20X1. at 103. The bonds mature in 20 years and pay interest
Suspect Company issued $900.000 of 9 percent first mortgage bonds on January 1 20X1. at 103. The bonds mature in 20 years and pay interest semiannually on January 1 and July 1. Prime Corporation purchased $600,000 of Suspect's bonds from the original purchaser on December 31, 20X5, for $594.000. Prme owns 60 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.) No Credit Event 1 Answer is not complete. Accounts Bonds payable Premium on bonds payable Investment in Suspect Company bonds Gain on bond retirement Debit 600.000 . 594.000 OOO OO B 2 27,000 Interest payable Interest receivable 27.000 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 joumal 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 Credit Debit 600,000 A 1 Accounts Bonds payable Premium on bonds payable Interest income Investment in Suspect Company bonds Interest expense Investment in Suspect Company NCI in NA of Suspect Company 594.000 OOOOOO B 2 27,000 Interest payable Interest receivable olo 27,000
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