Pretzel Corporation owns 60 percent of Stick Corporation's voting shares. On January 1, 20X2, Pretzel Corporation sold $160,000 parvalue, 10 percent first mortgage bonds to Stick for $166,000. The bonds mature in 10 years and pay interest semiannually on January 1and July 1.Required:a. Prepare the journal entries for 20X2 for Stick related to its ownership of Pretzel's bonds.b. Prepare the journal entries for 20X2 for Pretzel related to the bonds.c. Prepare the worksheet consolidation entries needed on December 31, 20X2, to remove the effects of the intercorporate ownershipof bonds.Answer is complete but not entirely correct.Complete this question by entering your answers in the tabs below.Required ARequired BRequired CPrepare the worksheet consolidation entries needed on December 31, 20X2, to remove the effects of the intercorporateownership of bonds.Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not roundyour intermediate calculations. Round your final answers to nearest whole dollarShow lessCreditNoEventAccountsABonds payableDebit160,000Bond premium5,179 xInterest income15,179Investment in Pretzel Corporation bonds165,179Interest expense15,179B2Interest payableInterest receivableRequired B8,0008,000

Answer:- Investment means an asset purchased in expectation of earning a return on such investment…

Pretzel Corporation owns 60 percent of Stick Corporation's voting shares. On January 1, 20X2, Pretzel Corporation sold $160,000 par value, 10 percent first mortgage bonds to Stick for $166,000. The bonds mature in 10 years and pay interest semiannually on January 1 and July 1. Required: a. Prepare the journal entries for 20X2 for Stick related to its ownership of Pretzel's bonds. b. Prepare the journal entries for 20X2 for Pretzel related to the bonds. c. Prepare the worksheet consolidation entries needed on December 31, 20X2, to remove the effects of the intercorporate ownership of bonds.

Pretzel Corporation owns 60 percent of Stick Corporation's voting shares. On January 1, 20X2, Pretzel Corporation sold $160,000 par value, 10 percent first mortgage bonds to Stick for $166,000. The bonds mature in 10 years and pay interest semiannually on January 1 and July 1. Required: a. Prepare the journal entries for 20X2 for Stick related to its ownership of Pretzel's bonds. b. Prepare the journal entries for 20X2 for Pretzel related to the bonds. c. Prepare the worksheet consolidation entries needed on December 31, 20X2, to remove the effects of the intercorporate ownership of bonds.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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