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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 Journal entry required" in the first account fleld. Do not round your intermediate calculations. Round your final answers to nearest whole dollar.)

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 Journal entry required" in the first account fleld. Do not round your intermediate calculations. Round your final answers to nearest whole dollar.)

FINANCIAL ACCOUNTING
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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Suspect Company Issued $600,000 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 $400,000 of Suspect's bonds from the original purchaser on December 31, 20X5, for $397,000. Prime 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 fleld. Do not round your intermediate calculations. Round your final answers to nearest whole dollar.) No A B No A Event 1 B 2 Event 1 2 Bonds payable Premium on bonds payable Investment in Suspect Company bonds Gain on bond retirement Interest payable Answer is complete but not entirely correct. Accounts Interest receivable 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 Journal entry required" in the first account fleld. Do not round your intermediate calculations. Round your final answers to nearest whole dollar.) Interest payable Answer is not complete. Bonds payable Premium on bonds payable Interest income Investment in Suspect Company bonds Interest receivable Accounts Debit 400,000 9,000 18,000 Debit 400,000 8,400 Credit 18,000 397,000 9,000 18,000 Credit 6,750 x 397,200 18,000
Transcribed Image Text:Suspect Company Issued $600,000 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 $400,000 of Suspect's bonds from the original purchaser on December 31, 20X5, for $397,000. Prime 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 fleld. Do not round your intermediate calculations. Round your final answers to nearest whole dollar.) No A B No A Event 1 B 2 Event 1 2 Bonds payable Premium on bonds payable Investment in Suspect Company bonds Gain on bond retirement Interest payable Answer is complete but not entirely correct. Accounts Interest receivable 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 Journal entry required" in the first account fleld. Do not round your intermediate calculations. Round your final answers to nearest whole dollar.) Interest payable Answer is not complete. Bonds payable Premium on bonds payable Interest income Investment in Suspect Company bonds Interest receivable Accounts Debit 400,000 9,000 18,000 Debit 400,000 8,400 Credit 18,000 397,000 9,000 18,000 Credit 6,750 x 397,200 18,000
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