Intercompany Financing TransactionsSessions Athletic Gear borrowed $600,000 from its parent, PF Consolidated Inc., at an interest rate of 3%. The loan was made on October 31, 2022, with interest duesemiannually on April 30 and October 31 of each year, and principal due in 2026. PF's accounting year ends on December 31. You are doing the consolidation workingpaper at December 31, 2023. The loan is still outstanding, and Sessions has made interest payments as required.a. What balances appear in the December 31, 2023, trial balances of PF and Sessions with respect to this intercompany loan? What balances should appear on theconsolidated financial statements?• Remember to use negative signs with your credit balance answers in the Dr (Cr) columns (not in the Credit column).• Enter numerical answers using all zeros (do not abbreviate answers to millions or thousands).PF Consolidated Inc. Sessions Athletic GearDr (Cr)Dr (Cr)DebitLoan receivable600,0000▾Credit600,000Consolidated BalancesDr (Cr)Interest receivable(4,500) xInterest payable0(4,500) xLoan payable0(600,000)Interest revenue(18,000)0Interest expense18,0000~4,500 x600,00018,000✔0 ✓4,500 x0 ✓0✓00 ✓18,0000<<<<<<

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Answered: Intercompany Financing Transactions…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable

Section: Chapter Questions

Problem 15P

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1. What is the ECOBV amortization schedule in this transaction? 2. What is the year-end balance of NCI? 3. What are the journal entries needed to complete the consolidation worksheet?
An entity purchased 4 year debt instruments with a face value of P15,000,000 on January 1, 2019 to collect contractual cash flows that are solely payments of principal and interest and to sell the financial asset. Interest is paid annually at a nominal rate of 8% that is paid every December 31. The following information is provided as follows: Date Effective Rate without Transaction Cost Effective Rate with Transaction Cost 01/01/2019 8.5% 9% 12/31/2019 10% 10.5% 12/31/2020 13% 13.5% 12/31/2021 12% 12.5% 12/31/2022 11% 12% Requirements: What is the initial carrying amount of the bond investment? What is the December 31, 2019 carrying amount of the bond investment? What is the 2020 interest income? What is the cumulative unrealized gain/loss in equity on December 31, 2020? How much is the 2020 unrealized gain recognized in the statement of comprehensive income? If the entity changes its business model in 2020 to collect contractual cash flows only, what is the…
An entity purchased 4-year debt instruments with a face value of P10,000,000 on January 1, 2019 to collect contractual cash flows that are solely payments of principal and interest. Interest is paid annually at a nominal rate of 10% that is paid every December 31. The following information is provided as follows: Date Effective Rate without Transaction Cost Effective Rate with Transaction Cost 01/01/2019 12% 13% 12/31/2019 14% 14.50% 12/31/2020 11% 11.50% 12/31/2021 9% 9.50% 12/31/2022 10.5% 11% Requirements: What is the initial carrying amount of the bond investment? What is the 2020 interest income? What is the December 31, 2020 carrying amount? If the entity changes its business model in 2020 to both collect contractual cash flows and to sell the financial asset, what is the unrealized gain or loss in equity on December 31, 2021? If the entity changes its business model in 2020 to both collect contractual cash flows and to sell the financial asset, what is the…
Please avoid solution in an image format thanku On January 1, 2016, Hyde Corporation purchased bonds with a face value of $300,000 for $308,373.53. The bonds are due June 30, 2019, carry a 13% stated interest rate, and were purchased to yield 12%. Interest is payable semiannually on June 30 and December 31. On March 31, 2017, in contemplation of a major acquisition, the company sold one-half the bonds for $159,500 including accrued interest; the remainder were held until maturity. Required: Prepare the journal entries to record the purchase of the bonds, each interest payment, the partial sale of the investment on March 31, 2017, and the retirement of the bond issue on June 30, 2019.
b. Forgave the accrued interest for one year amounting to P12,000. Case 5 Brewed entered into two restructuring agreement in 2021, Brewed is currently experiencing financial difficulties. The details of the restructuring of its note payable are as follows: Note payable- Café Company On December 31, 2021, Brewed Company entered into a debt restructunng agreement with Café Company. A note for P100,000 and one yea accrued interest was due on this date to Café Company. The termis restructuring are as follows: a. Reduced the principal obligation to P70,000. b. Forgave the accrued interest for one year amounting to P12,00. c. Extend the maturity date to December 31, 2024.
Current Attempt in Progress In its first year of operations, Carla Vista Corporation purchased available-for-sale debt securities costing $64,000 as a long-term investment. At December 31, 2027, the fair value of the securities is $59,600. Prepare the adjusting entry to record the securities at fair value. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Debit Credit Dec. 31
On January 1, 2022, BTS Company purchased 3,000, P1,000 face value term bons with a stated rate of 10% as at amortized cost. The bonds pay interest annually on December 31 and will be redeemed entirely by the issuer on December 31, 2025. The bond investment was purchased for P2,819,100 at an effective rate of 12%.On December 31, 2023, the entity changes business model for managing its financial assets and this investment as reclassified as debt investments at fair value through profit or loss. On this date, the bonds are quoted at 101. What is the carrying value of the debt investment on December 31, 2023 prior to reclassification?
Current Attempt in Progress In its first year of operations, Sheridan Corporation purchased available-for-sale debt securities costing $68,500 as a long-term investment. At December 31, 2022, the fair value of the securities is $63.650. Prepare the adjusting entry to record the securities at fair value. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry for the account titles and enter O for the amounts.) Date Dec. 31 Account Titles and Explanation Debit Credit
On January 1, 2023 AAA Company acquired BBB Company 10%, P600,000 bonds for P621,300. The bonds which pays interest on every June 30 and December 31. The bond will mature on January 1, 2028 and were purchased to yield 9%. The business model of the AAA Company in managing investment is to hold the asset in order to collect the contractual cash flows. 1. how much is the interest income in 2023 2.how much is the carrying amount of the bonds at december 31,2023 3.how much is the unamortized portion of premium on december 31, 2024 4. how much cash to be debited on december 31,2024
Facts for Questions 40-41 Tweety, Inc. plans to be acquired by another company. Tweety, Inc.'s incomae stalement reflects the following: Net income Extraordinary Loss on Sale of a Division Depreciation and Amortization Expense Planned Capital Expenditures Decrease in Necessary Working Capital Debt Payments Interest Expense, net Non-Recurring Gain 971,237 185,371 62,c86 37,534 15,732 34,049 21,362 10,742 There are currently two proposals being considered by Tweety, Inc. Proposal 1: the acquiring company wil purchase all of Twoety, Inc.'s common stock outstanding in an all-cash deal. The purchase price will refect the entorprise value of the company (tactoring in its debi). Proposal 2: the acquiring company wil purchase all of Tweoty. Inc's common stock outstanding in an all-cash deal. The purchase price will refect the value of the company on a debl-free basis. Question 40 After factoring in Tweety, Inc.'s debt, what amount of cash is available for distribution lo the common…
not a graded assignement
Following are the non-strategic Investment transactions of Corona Inc.: 2023 Jan. 1 Purchased for $91,145 an 8.58, 586,000 bond that matures in 20 years from anna Corporation when the market interest rate was 7.98. There was a $50 transaction fee included in the above-noted payment amount. Interest is paid semiannually beginning June 30, 2023. The acquisition vas made with intention to hold to maturity. June 30 Received interest on the bond. July 1 Paid $126,633 for a Trust Inc. bond with a par value of $131,000 and a fifteen-years ters. The bond pays interest quarterly beginning September 30, 2023, at the annual rate of 8.38; the market interest rate on the date of purchase was 8.7%. There was a $50 transaction fee included in the above-soted payment amount. Sept. 30 Received interest on the Trust bond. Dec. 31 Received interest on the lanna and Trust bonds. 31 The fair values of the bonds on this date equalled the fair values. Required: 1. For each of the bond investments, prepare an…

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