Prepare journal entry B that would be prepared on the consolidating worksheet for the consolidation of the Jones and Ace Companies for the year ended December 31, 2023.
Prepare journal entry B that would be prepared on the consolidating worksheet for the consolidation of the Jones and Ace Companies for the year ended December 31, 2023.
Financial Accounting
14th Edition
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Carl Warren, Jim Reeve, Jonathan Duchac
Chapter15: Investments And Fair Value Accounting
Section: Chapter Questions
Problem 1E: Parilo Company acquired 170,000 of Makofske Co., 5% bonds on May 1, 2016, at their face amount....
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Jj.52.
![The Jones Company owns 80% of the stock of the Ace Company. On January 1, 2023, Jones purchased $20,000 (face
value) of Ace's bonds in the open market. These bonds had an 8% cash interest rate. On the date of acquisition, the
liability was recorded at $21,386 by the Ace Company, indicating an effective interest rate of 6%. Jones paid $18,732 for
the bonds, indicating an effective interest rate of 10%.
Required:
Prepare journal entry B that would be prepared on the consolidating worksheet for the consolidation of the Jones and
Ace Companies for the year ended December 31, 2023.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fac9398c9-0380-4d86-91d8-962bd9cfd714%2F7f5dc1e2-2a02-4677-ae89-bcbcc40bd8e5%2Fznmn83c_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The Jones Company owns 80% of the stock of the Ace Company. On January 1, 2023, Jones purchased $20,000 (face
value) of Ace's bonds in the open market. These bonds had an 8% cash interest rate. On the date of acquisition, the
liability was recorded at $21,386 by the Ace Company, indicating an effective interest rate of 6%. Jones paid $18,732 for
the bonds, indicating an effective interest rate of 10%.
Required:
Prepare journal entry B that would be prepared on the consolidating worksheet for the consolidation of the Jones and
Ace Companies for the year ended December 31, 2023.
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