al years ago Brant, Inc., sold $900,000 in bonds to the public. Annual cash interest of 9 percent ($81,000) was to be p The bonds were issued at a discount to yield 12 percent. At the beginning of 2019, Zack Corporation (a wholly owned ht) purchased $150,000 of these bonds on the open market for $171,000, a price based on an effective interest rate of ond liability had a carrying amount on that date of $780,000. Assume Brant uses the equity method to account intern ment in Zack. What consolidation entry would be required for these bonds on December 31, 2019 and December 31, 2021? (If no en equired for a transaction/event, select "No journal entry required" in the first account field. Round your intermedi calculations and final answers to nearest whole number.) w transaction list onsolidation Worksheet Entries

al years ago Brant, Inc., sold $900,000 in bonds to the public. Annual cash interest of 9 percent ($81,000) was to be p The bonds were issued at a discount to yield 12 percent. At the beginning of 2019, Zack Corporation (a wholly owned ht) purchased $150,000 of these bonds on the open market for $171,000, a price based on an effective interest rate of ond liability had a carrying amount on that date of $780,000. Assume Brant uses the equity method to account intern ment in Zack. What consolidation entry would be required for these bonds on December 31, 2019 and December 31, 2021? (If no en equired for a transaction/event, select "No journal entry required" in the first account field. Round your intermedi calculations and final answers to nearest whole number.) w transaction list onsolidation Worksheet Entries

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On July 1, 2020, West Company purchased for cash, three $10,000 bonds of North Corporation at a market rate of 4%. The bonds pay 5% interest, payable on a semiannual basis each July 1 and January 1, and mature on July 1, 2023. The bonds are classified as trading securities. The annual reporting period ends December 31. Assume the effective interest method of amortization of any discounts or premiums. Ignore income taxes. d. Record the receipt of interest on January 1, 2021. e. Record the sale of all of the bonds on January 2, 2021, for $33,200. f. Record the adjustment to the Fair Value Adjustment account on December 31, 2021, assuming no additional TS investments. Note: List multiple debits or credits (when applicable) in alphabetical order. Note: Round each amount to the nearest whole dollar. Note: If a journal entry isn't required for the transaction, select "N/A" as the account names and leave the Dr. and Cr. answers blank (zero).
Sheridan Company purchased $1750000 of 10% bonds of Scott Company on January 1, 2021, paying $1645434. The bonds mature January 1, 2031; interest is payable each July 1 and January 1. The discount of $104566 provides an effective yield of 11%. Sheridan Company uses the effective-interest method and plans to hold these bonds to maturity. For the year ended December 31, 2021, Sheridan Company should report interest revenue from the Scott Company bonds of: $175000. O $185457. O $181163. O $180998.
On January 2, 2018, Crane Corporation, a small company that follows ASPE, issued $1.8 million of 11% bonds at 98 due on December 31, 2027. Legal and other costs of $180,000 were incurred in connection with the issue. Crane has a policy of capitalizing and amortizing the legal and other costs incurred by including them with the bond recorded at the date of issuance. Interest on the bonds is payable each December 31. The $180,000 of issuance costs are being deferred and amortized on a straight-line basis over the 10- year term of the bonds. The discount on the bonds is also being amortized on a straight-line basis over the 10 years. (The straight-line method is not materially different in its effect compared with the effective interest method.) The bonds are callable at 103 (that is, at 103% of their face amount), and on January 2, 2023, the company called a face amount of $1,000,000 of the bonds and retired them. (a) Ignoring income taxes, calculate the amount of loss, if any, that the…
Several years ago Brant, Inc., sold $900,000 in bonds to the public. Annual cash interest of 9 percent ($81,000) was to be paid on this debt. The bonds were issued at a discount to yield 12 percent. At the beginning of 2019, Zack Corporation (a wholly owned subsidiary of Brant) purchased $150,000 of these bonds on the open market for $171,000, a price based on an effective interest rate of 7 percent. The bond liability had a carrying amount on that date of $780,000. Assume Brant uses the equity method to account internally for its investment in Zack. a. & b. What consolidation entry would be required for these bonds on December 31, 2019 and December 31, 2021? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate calculations and final answers to nearest whole number.)
Herman Company received proceeds of $188,500 on 10-year, 8% bonds issued on January 1, 2018. The bonds had a face value of $200,000, pay semiannually on June 30 and December 31, and have a call price of 101. Herman uses the straight-line method of amortization. What is the carrying value of the bonds on January 1, 2020. $200,000 O $190, 800 O $189,650 O $197,700
On January 1, 2020, Splish Company purchased $300,000, 6% bonds of Cabana Co. for $313,128. The bonds were purchased to yield 5% interest. Interest is payable semiannually on July 1 and January 1. The bonds mature on January 1, 2025. Splish Company uses the effective-interest method to amortize discount or premium. On January 1, 2022, Splish Company sold the bonds for $305,400 after receiving interest to meet its liquidity needs.
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Krause Corporation issued $2,600,000, 10-year, 5% bonds for $2,470,000 on January 1, 2019. Interest is paid semiannually on January 1 and July 1. The corporation uses the straight-line method of amortization. Krause's fiscal year ends on December 31. The amount of discount amortization on July 1, 2019, would be A. $130,000 B. $13,000 C. $6,500 D. $130,000
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Several years ago, Soriano Corporation sold bonds with a face value of $1,000,000 to the public at a premium. Annual cash interest of 8 percent (i.e., $80,000) was to be paid on this debt. On January 1, 2019, Padino Inc., the parent company of Soriano Corporation, purchased these bonds on the open market for $940,000. (Hint: Did Padino purchase the bonds at a discount or a premium?) On that date, the bonds had 10 years until maturity and Soriano reported the book value of Bonds Payable of $1,045,000. Assume Padino uses the equity method to internally account for its investment in Soriano. Both parties use the straight-line method of amortization. Prepare the Bonds Payable amortization table for Soriano Corporation for years 2019-2021.
Several years ago Brant, Inc., sold $960,000 in bonds to the public. Annual cash interest of 9 percent ($86,400) was to be paid on this debt. The bonds were issued at a discount to yield 12 percent. At the beginning of 2019, Zack Corporation (a wholly owned subsidiary of Brant) purchased $120,000 of these bonds on the open market for $141,000, a price based on an effective interest rate of 7 percent. The bond liability had a carrying amount on that date of $820,000. Assume Brant uses the equity method to account internally for its investment in Zack. a. & b. What consolidation entry would be required for these bonds on December 31, 2019 and December 31, 2021? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate calculations and final answers to nearest whole number.) No 1 2 Answer is complete but not entirely correct. Accounts Date December 31, 201 Bonds payable Interest income Investment in bonds…
Krause Corporation issued $2,300,000, 10-year, 6% bonds for $2,231,000 on January 1, 2022. Interest is paid semiannually on January 1 and July 1. The corporation uses the straight-line method of amortization. Krause's fiscal year ends on December 31. The amount of discount amortization on July 1, 2022, would be OA. $138,000. OB. $69,000. OC. $6,900. OD. $3,450.