Intercompany Financing Transactions Sessions 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 due semiannually 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 working paper 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 the consolidated 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 Gear Dr (Cr) Dr (Cr) Debit Loan receivable 600,000 0▾ Credit 600,000 Consolidated Balances Dr (Cr) Interest receivable (4,500) x Interest payable 0 (4,500) x Loan payable 0 (600,000) Interest revenue (18,000) 0 Interest expense 18,000 0~ 4,500 x 600,000 18,000✔ 0 ✓ 4,500 x 0 ✓ 0✓ 0 0 ✓ 18,000 0 <<<<<<

Intercompany Financing Transactions Sessions 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 due semiannually 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 working paper 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 the consolidated 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 Gear Dr (Cr) Dr (Cr) Debit Loan receivable 600,000 0▾ Credit 600,000 Consolidated Balances Dr (Cr) Interest receivable (4,500) x Interest payable 0 (4,500) x Loan payable 0 (600,000) Interest revenue (18,000) 0 Interest expense 18,000 0~ 4,500 x 600,000 18,000✔ 0 ✓ 4,500 x 0 ✓ 0✓ 0 0 ✓ 18,000 0 <<<<<<

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 14P: Restructuring (Debtor) Oakwood Corporation is delinquent on a 2,400,000, 10% note to Second National...

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