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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Kk.25.
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
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education