The consolidated balance sheet of Pop Corporation and Son (an 80 percent-owned subsidiary) at December 31, 2016,

Question:

The consolidated of Pop and Son (an 80 percent-owned subsidiary) at December 31, 2016, includes the following items related to an 8 percent, $500,000 outstanding bond issue:
Current Liabilities
Bond interest payable (6 months' interest due January 1, 2017) ........... $ 20,000
Long-Term Liabilities
8% bonds payable (maturity date January 1, 2021, net of
$15,000 unamortized discount) ................................................. 485,000
Pop is the issuer, and straight-line amortization is applicable. Son purchases $300,000 par of the outstanding bonds of Pop on July 2, 2017, for $287,400.
REQUIRED
1. Calculate the following:
a. The gain or loss on constructive retirement of the bonds
b. The consolidated bond interest expense for 2017
c. The consolidated bond liability at December 31, 2017
2. How would the amounts determined in part 1 differ if Pop purchased Sun's bonds?
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...