Cairns owns 75 percent of the voting stock of Hamilton, Inc. The parent's interest was acquired several years ago on the date that the subsidiary was formed. Consequently, no goodwill or other allocation was recorded in connection with the acquisition. Cairns uses the equity method in its internal records to account for its investment in Hamilton. On January 1, 2017, Hamilton sold $1,700,000 in 10-year bonds to the public at 105. The bonds had a cash interest rat of 10 percent payable every December 31. Cairns acquired 35 percent of these bonds at 96 percent of face value on January 1, 2019. Both companies utilize the straight-line method of amortization. Prepare the consolidation worksheet entries to recognize the effects of the intra-entity bonds at each of the following dates. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) a. December 31, 2019 b. December 31, 2020 c. December 31, 2021

Cairns owns 75 percent of the voting stock of Hamilton, Inc. The parent's interest was acquired several years ago on the date that the subsidiary was formed. Consequently, no goodwill or other allocation was recorded in connection with the acquisition. Cairns uses the equity method in its internal records to account for its investment in Hamilton. On January 1, 2017, Hamilton sold $1,700,000 in 10-year bonds to the public at 105. The bonds had a cash interest rat of 10 percent payable every December 31. Cairns acquired 35 percent of these bonds at 96 percent of face value on January 1, 2019. Both companies utilize the straight-line method of amortization. Prepare the consolidation worksheet entries to recognize the effects of the intra-entity bonds at each of the following dates. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) a. December 31, 2019 b. December 31, 2020 c. December 31, 2021

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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