Help for parts J and K. VII January 1, 2010, parent lends 70% owned subsidiary $5,000,000 at 6% annual interest fortwo years. Subsidiary pays the accrued interest at the end of each year. Answer the following:a. How much interest income is recorded on the Parent's books in 2010.b. How much interest expense is recorded on the subsidiary's books in 2010.c. What journal entry did the parent record on January 1, 2010Dr.Cr.d. What journal entry did the subsidiary record on January 1, 2010Dr.Cr.e. What consolidation worksheet entry is recorded at December 31, 2010 to eliminate theintercompany receivable and payable._$Dr.Cr.f. What consolidation worksheet entry is recorded at December 31, 2010 to eliminate theintercompany interest income and interest expense__$Dr.Cr.g.How much is consolidated loan receivable at December 31, 2010h. How much is consolidated loan payable at December 31, 2010i.How much is consolidated interest income at December 31, 2010j. How much is consolidated interest expense at December 31, 2010k.Assume the subsidiary had no other transactions in 2010. How much is noncontrollinginterest in subsidiary net income

Introduction:- A parent company is a large organization which has the interest of controlling of one…

Answered: for parts J and K.

Business

Accounting

for parts J and K.

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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Question

Help for parts J and K.

VII January 1, 2010, parent lends 70% owned subsidiary $5,000,000 at 6% annual interest for
two years. Subsidiary pays the accrued interest at the end of each year. Answer the following:
a. How much interest income is recorded on the Parent's books in 2010.
b. How much interest expense is recorded on the subsidiary's books in 2010.
c. What journal entry did the parent record on January 1, 2010
Dr.
Cr.
d. What journal entry did the subsidiary record on January 1, 2010
Dr.
Cr.
e. What consolidation worksheet entry is recorded at December 31, 2010 to eliminate the
intercompany receivable and payable.
_$
Dr.
Cr.
f. What consolidation worksheet entry is recorded at December 31, 2010 to eliminate the
intercompany interest income and interest expense
__$
Dr.
Cr.
g.
How much is consolidated loan receivable at December 31, 2010
h. How much is consolidated loan payable at December 31, 2010
i.
How much is consolidated interest income at December 31, 2010
j. How much is consolidated interest expense at December 31, 2010
k.
Assume the subsidiary had no other transactions in 2010. How much is noncontrolling
interest in subsidiary net income

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