Bundle Company issues 1,000,000 par value 10 year bonds at 102 on January 1, 2018, which Mega Corporation purchased. The coupon rate on the bonds is 9%. Interest payment are made semiannually in July 1 and January 1. On July 1, 2021, Parent Company purchased 500,000 par value of the bonds from Mega Corporation for 492,200. Bundle Company owns 65% of A Company's voting shares. During 2021, Bundle Company recorded an interest income on yhe aforementioned bonds payable of 23,100, while A Company recorded an interest expese of 44,000, in ehich 22,000 was incurred from July 1 to December 31. B Company has a comprehensive income of 500,000 while A Company has 150,000. No other intercompany transaction occurred during 2021. Assume straight-line amortization. Compute for the gain on extinguishment of bonds to be recognized in the 2021 consolidated statement of comprehensive income. Compute the comprehensive income assigned to the controlling interest for 2021. Compute the comprehensive income assigned to the non-controlling interest for 2021.
Bundle Company issues 1,000,000 par value 10 year bonds at 102 on January 1, 2018, which Mega Corporation purchased. The coupon rate on the bonds is 9%. Interest payment are made semiannually in July 1 and January 1. On July 1, 2021, Parent Company purchased 500,000 par value of the bonds from Mega Corporation for 492,200. Bundle Company owns 65% of A Company's voting shares. During 2021, Bundle Company recorded an interest income on yhe aforementioned bonds payable of 23,100, while A Company recorded an interest expese of 44,000, in ehich 22,000 was incurred from July 1 to December 31. B Company has a comprehensive income of 500,000 while A Company has 150,000. No other intercompany transaction occurred during 2021. Assume straight-line amortization. Compute for the gain on extinguishment of bonds to be recognized in the 2021 consolidated statement of comprehensive income. Compute the comprehensive income assigned to the controlling interest for 2021. Compute the comprehensive income assigned to the non-controlling interest for 2021.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Bundle Company issues 1,000,000 par value 10 year bonds at 102 on January 1, 2018, which Mega Corporation purchased. The coupon rate on the bonds is 9%. Interest payment are made semiannually in July 1 and January 1. On July 1, 2021, Parent Company purchased 500,000 par
B Company has a comprehensive income of 500,000 while A Company has 150,000. No other intercompany transaction occurred during 2021. Assume straight-line amortization.
- Compute for the gain on extinguishment of bonds to be recognized in the 2021 consolidated statement of comprehensive income.
- Compute the comprehensive income assigned to the controlling interest for 2021.
- Compute the comprehensive income assigned to the non-controlling interest for 2021.
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