Helen Corporation owns 60 percent of Snow Enterprises' stock. On January 1, 20X1, Helen sold $1.07 million par value, 10 percent (paid semiannually), 20-year, first mortgage bonds to King Corporation at 98. On January 1, 20X8, Snow purchased $321,000 par value of the Helen bonds directly from King for $317,820. Required: Prepare the consolidation entry needed at December 31, 20x8, to remove the effects of the intercorporate bond ownership in preparing consolidated financial statements. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations. Round your final answers to nearest whole dollar.
Helen Corporation owns 60 percent of Snow Enterprises' stock. On January 1, 20X1, Helen sold $1.07 million par value, 10 percent (paid semiannually), 20-year, first mortgage bonds to King Corporation at 98. On January 1, 20X8, Snow purchased $321,000 par value of the Helen bonds directly from King for $317,820. Required: Prepare the consolidation entry needed at December 31, 20x8, to remove the effects of the intercorporate bond ownership in preparing consolidated financial statements. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations. Round your final answers to nearest whole dollar.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
C8
Transcribed Image Text:Helen Corporation owns 60 percent of Snow Enterprises' stock. On January 1, 20X1, Helen sold $1.07 million par value, 10 percent (paid semiannually), 20-year, first mortgage bonds to King Corporation at
98. On January 1, 20X8, Snow purchased $321,000 par value of the Helen bonds directly from King for $317,820.
Required:
Prepare the consolidation entry needed at December 31, 20x8, to remove the effects of the intercorporate bond ownership in preparing consolidated financial statements.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations. Round your final answers to nearest whole
dollar.
No
A
Event
1
Bonds payable
Interest income
Accounts
Ć
Loss on constructive bond retirement
Investment in Packed Corporation bonds
Interest expense
Discount on bonds payable
✓
✓
✓
✓
Debit
321,000
Credit
317,820
32,345 X
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