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Consolidated amounts when affiliate's debt is acquired from non-affiliate Assume that a Parent company owns 100 percent of its Subsidiary. On January 1, 2019, the Parent company had $360,000 of bonds payable (par) outstanding with a carrying value of $378,000. The bonds were originally issued to an unaffiliated company. On that same date, the Subsidiary acquired the bonds for $356,400. During 2019, the Parent company reported $162,000 of (pre-consolidation) income from its own operations (Le, prior to any equity method adjustments by the Parent company) and after recording interest expense. The Subsidiary reported $90,000 of (pre-consolidation) income from its own operations after recording interest income. Related to the bonds during 2019, the parent reported interest expense of $40,500 while the subsidiary reported interest income of $36,900. Determine the following amounts that will appear in the 2019 consolidated income statement Note: If no amount will appear on the consolidated income statement, enter zero. If item c. is a loss, use a negative sign with your answer. Amount & Interest income from bond investment b. Interest expense on bond payable Gain Diss) on constructive retirement of bond payable s 21,600 $240,000 d Consolidated net income

Consolidated amounts when affiliate's debt is acquired from non-affiliate Assume that a Parent company owns 100 percent of its Subsidiary. On January 1, 2019, the Parent company had $360,000 of bonds payable (par) outstanding with a carrying value of $378,000. The bonds were originally issued to an unaffiliated company. On that same date, the Subsidiary acquired the bonds for $356,400. During 2019, the Parent company reported $162,000 of (pre-consolidation) income from its own operations (Le, prior to any equity method adjustments by the Parent company) and after recording interest expense. The Subsidiary reported $90,000 of (pre-consolidation) income from its own operations after recording interest income. Related to the bonds during 2019, the parent reported interest expense of $40,500 while the subsidiary reported interest income of $36,900. Determine the following amounts that will appear in the 2019 consolidated income statement Note: If no amount will appear on the consolidated income statement, enter zero. If item c. is a loss, use a negative sign with your answer. Amount & Interest income from bond investment b. Interest expense on bond payable Gain Diss) on constructive retirement of bond payable s 21,600 $240,000 d Consolidated net income

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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Consolidated amounts when affiliate's debt is acquired from non-affiliate Assume that a Parent company owns 100 percent of its Subsidiary. On January 1, 2019, the Parent company had $360,000 of bonds payable (par) outstanding with a carrying value of $378,000. The bonds were originally issued to an unaffiliated company. On that same date, the Subsidiary acquired the bands for $356,400. During 2019, the Parent company reported $162,000 of (pre-consolidation) income from its own operations (te, prior to any equity method adjustments by the Parent company) and after recording interest expense. The Subsidiary reported $90,000 of (pre-consolidation) income from its own operations after recording interest income. Related to the bonds during 2019, the parent reported interest expense of $40,500 while the subsidiary reported interest income of $36,900. Determine the following amounts that will appear in the 2019 consolidated income statement Note: if no amount will appear on the consolidated income statement, enter zero. If item c. is a loss, use a negative sign with your answer. Amount & Interest income from bond investment b. Interest expense on bond payable Gain Duss) on constructive retirement of bond payable s & Consolidated net income 55 D✔ 21,600 $240,000 x
Transcribed Image Text:Consolidated amounts when affiliate's debt is acquired from non-affiliate Assume that a Parent company owns 100 percent of its Subsidiary. On January 1, 2019, the Parent company had $360,000 of bonds payable (par) outstanding with a carrying value of $378,000. The bonds were originally issued to an unaffiliated company. On that same date, the Subsidiary acquired the bands for $356,400. During 2019, the Parent company reported $162,000 of (pre-consolidation) income from its own operations (te, prior to any equity method adjustments by the Parent company) and after recording interest expense. The Subsidiary reported $90,000 of (pre-consolidation) income from its own operations after recording interest income. Related to the bonds during 2019, the parent reported interest expense of $40,500 while the subsidiary reported interest income of $36,900. Determine the following amounts that will appear in the 2019 consolidated income statement Note: if no amount will appear on the consolidated income statement, enter zero. If item c. is a loss, use a negative sign with your answer. Amount & Interest income from bond investment b. Interest expense on bond payable Gain Duss) on constructive retirement of bond payable s & Consolidated net income 55 D✔ 21,600 $240,000 x
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