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
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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Help for parts D, E,F
Transcribed Image Text: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
Expert Solution
Step 1
Consolidated financial statements are prepared taking all assets, liabilities, income, expenses of group entities as a single entity.
Consolidated financial statements includes consolidated income statement, consolidated balance sheet, consolidated cash flow statement.
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