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Pretzel Corporation owns 60 percent of Stick Corporation's voting shares. On January 1, 20X2, Pretzel Corporation sold $150,000 par value, 6 percent first mortgage bonds to Stick for $156,000. The bonds mature in 10 years and pay interest semiannually on January 1 and July 1.

Pretzel Corporation owns 60 percent of Stick Corporation's voting shares. On January 1, 20X2, Pretzel Corporation sold $150,000 par value, 6 percent first mortgage bonds to Stick for $156,000. The bonds mature in 10 years and pay interest semiannually on January 1 and July 1.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Pretzel Corporation owns 60 percent of Stick Corporation's voting shares. On January 1, 20X2, Pretzel Corporation sold $150,000 par value, 6 percent first mortgage bonds to Stick for $156,000. 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.
Transcribed Image Text:Pretzel Corporation owns 60 percent of Stick Corporation's voting shares. On January 1, 20X2, Pretzel Corporation sold $150,000 par value, 6 percent first mortgage bonds to Stick for $156,000. 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.
No 1 2 3 Date January 1, 20X2 July 1, 20X2 Required A General Journal Investment in Pretzel Corporation bonds Cash December 31, 20X Interest receivable Interest income Investment in Pretzel Corporation bonds Complete this question by entering your answers in the tabs below. No Cash Date Interest income Investment in Pretzel Corporation bonds Required B Required C Complete this question by entering your answers in the tabs below. Required A Required B Required C Event General Journal Accounts ›› < Required B 000 Debit 000 Prepare the journal entries for 20X2 for Pretzel related to the bonds. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do your intermediate calculations. Round your final answers to nearest whole dollar. Required C > ♥ Debit Debit 156,000 4,500 4,500 Credit Prepare the worksheet consolidation entries needed on December 31, 20X2, to remove the effects of the intercorporate ownership of bonds. Credit Credit Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not rot your intermediate calculations. Round your final answers to nearest whole dollar. 156,000 4,200 x 300 4,200 300 x Show less
Transcribed Image Text:No 1 2 3 Date January 1, 20X2 July 1, 20X2 Required A General Journal Investment in Pretzel Corporation bonds Cash December 31, 20X Interest receivable Interest income Investment in Pretzel Corporation bonds Complete this question by entering your answers in the tabs below. No Cash Date Interest income Investment in Pretzel Corporation bonds Required B Required C Complete this question by entering your answers in the tabs below. Required A Required B Required C Event General Journal Accounts ›› < Required B 000 Debit 000 Prepare the journal entries for 20X2 for Pretzel related to the bonds. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do your intermediate calculations. Round your final answers to nearest whole dollar. Required C > ♥ Debit Debit 156,000 4,500 4,500 Credit Prepare the worksheet consolidation entries needed on December 31, 20X2, to remove the effects of the intercorporate ownership of bonds. Credit Credit Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not rot your intermediate calculations. Round your final answers to nearest whole dollar. 156,000 4,200 x 300 4,200 300 x Show less
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