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Problem 6-28 (Algo) (LO 6-3) Cairns owns 75 percent of the voting stock of Hamilton, Inc. The parent's Interest was acquired several years ago on the date that the subsidiary was formed. Consequently, no goodwill or other allocation was recorded in connection with the acquisition. Cairns uses the equity method in its internal records to account for Its investment in Hamilton. On January 1, 2017, Hamilton sold $1,100,000 in 10-year bonds to the public at 110. The bonds had a cash interest rate of 10 percent payable every December 31. Cairns acquired 45 percent of these bonds at 92 percent of face value on January 1, 2019. Both companies utilize the straight-line method of amortization. Prepare the consolidation worksheet entries to recognize the effects of the intra-entity bonds at each of the following dates. (If no entry Is requlred for a transaction/event, select "No Journal entry requlred" in the first account field.) a. December 31, 2019 b. December 31, 2020 c. December 31, 2021

Problem 6-28 (Algo) (LO 6-3) Cairns owns 75 percent of the voting stock of Hamilton, Inc. The parent's Interest was acquired several years ago on the date that the subsidiary was formed. Consequently, no goodwill or other allocation was recorded in connection with the acquisition. Cairns uses the equity method in its internal records to account for Its investment in Hamilton. On January 1, 2017, Hamilton sold $1,100,000 in 10-year bonds to the public at 110. The bonds had a cash interest rate of 10 percent payable every December 31. Cairns acquired 45 percent of these bonds at 92 percent of face value on January 1, 2019. Both companies utilize the straight-line method of amortization. Prepare the consolidation worksheet entries to recognize the effects of the intra-entity bonds at each of the following dates. (If no entry Is requlred for a transaction/event, select "No Journal entry requlred" in the first account field.) a. December 31, 2019 b. December 31, 2020 c. December 31, 2021

FINANCIAL ACCOUNTING
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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Problem 6-28 (Algo) (LO 6-3) Calrns owns 75 percent of the voting stock of Hamilton, Inc. The parent's Interest was acquired several years ago on the date that the subsidiary was formed. Consequently, no goodwill or other allocation was recorded in connection with the acquisition. Calrns uses the equity method in its internal records to account for Its Investment in Hamilton. On January 1, 2017, Hamlton sold $1,100,000 in 10-year bonds to the public at 110. The bonds had a cash interest rate of 10 percent payable every December 31. Cairns acquired 45 percent of these bonds at 92 percent of face value on January 1, 2019. Both companles utilize the straight-line method of amortization. Prepare the consolidation worksheet entries to recognize the effects of the intra-entity bonds at each of the following dates. (If no entry Is required for a transactlon/event, select "No Journal entry requlred" In the first account fleld.) a. December 31, 2019 b. December 31, 2020 c. December 31, 2021 view transaction list Consolidation Worksheet Entries 1 2 3 > Prepare Consolidation Entry B to account for these bonds on December 31, 2019. Note: Enter debits before credits. Date Accounts Debit Credit December 31, 2019
Transcribed Image Text:Problem 6-28 (Algo) (LO 6-3) Calrns owns 75 percent of the voting stock of Hamilton, Inc. The parent's Interest was acquired several years ago on the date that the subsidiary was formed. Consequently, no goodwill or other allocation was recorded in connection with the acquisition. Calrns uses the equity method in its internal records to account for Its Investment in Hamilton. On January 1, 2017, Hamlton sold $1,100,000 in 10-year bonds to the public at 110. The bonds had a cash interest rate of 10 percent payable every December 31. Cairns acquired 45 percent of these bonds at 92 percent of face value on January 1, 2019. Both companles utilize the straight-line method of amortization. Prepare the consolidation worksheet entries to recognize the effects of the intra-entity bonds at each of the following dates. (If no entry Is required for a transactlon/event, select "No Journal entry requlred" In the first account fleld.) a. December 31, 2019 b. December 31, 2020 c. December 31, 2021 view transaction list Consolidation Worksheet Entries 1 2 3 > Prepare Consolidation Entry B to account for these bonds on December 31, 2019. Note: Enter debits before credits. Date Accounts Debit Credit December 31, 2019
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