Required A Required B Required C Prepare all worksheet consolidation entries needed to remove the effects of the intercorporate bond ownership in preparing consolidated financial statements for 20X4. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not rour your intermediate calculations. Round your final answers to nearest whole dollar. No A Event 1 Accounts Bonds payable Interest income Investment in Scarf Company bonds Bond discount Interest expense B 2 Interest payable Interest receivable Show less Debit Credit 400,000 16,800 × 395,200 8,000 425,600 16,000 16,000 Purse Corporation owns 70 percent of Scarf Company's voting shares. On January 1, 20X3, Scarf sold bonds with a par value of $600,000 at 98. Purse purchased $400,000 par value of the bonds; the remainder was sold to nonaffiliates. The bonds mature in five years and pay an annual interest rate of 8 percent. Interest is paid semiannually on January 1 and July 1. Note: Assume using straight-line amortization of bond discount or premium. Required: c. Prepare all worksheet consolidation entries needed to remove the effects of the intercorporate bond ownership in preparing consolidated financial statements for 20X4.
Required A Required B Required C Prepare all worksheet consolidation entries needed to remove the effects of the intercorporate bond ownership in preparing consolidated financial statements for 20X4. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not rour your intermediate calculations. Round your final answers to nearest whole dollar. No A Event 1 Accounts Bonds payable Interest income Investment in Scarf Company bonds Bond discount Interest expense B 2 Interest payable Interest receivable Show less Debit Credit 400,000 16,800 × 395,200 8,000 425,600 16,000 16,000 Purse Corporation owns 70 percent of Scarf Company's voting shares. On January 1, 20X3, Scarf sold bonds with a par value of $600,000 at 98. Purse purchased $400,000 par value of the bonds; the remainder was sold to nonaffiliates. The bonds mature in five years and pay an annual interest rate of 8 percent. Interest is paid semiannually on January 1 and July 1. Note: Assume using straight-line amortization of bond discount or premium. Required: c. Prepare all worksheet consolidation entries needed to remove the effects of the intercorporate bond ownership in preparing consolidated financial statements for 20X4.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter9: Long-term Liabilities
Section: Chapter Questions
Problem 15MCQ
Related questions
Question
3c
Transcribed Image Text:Required A Required B Required C
Prepare all worksheet consolidation entries needed to remove the effects of the intercorporate bond ownership in preparing
consolidated financial statements for 20X4.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not rour
your intermediate calculations. Round your final answers to nearest whole dollar.
No
A
Event
1
Accounts
Bonds payable
Interest income
Investment in Scarf Company bonds
Bond discount
Interest expense
B
2
Interest payable
Interest receivable
Show less
Debit
Credit
400,000
16,800 ×
395,200
8,000
425,600
16,000
16,000
Transcribed Image Text:Purse Corporation owns 70 percent of Scarf Company's voting shares. On January 1, 20X3, Scarf sold bonds with a par
value of $600,000 at 98. Purse purchased $400,000 par value of the bonds; the remainder was sold to nonaffiliates.
The bonds mature in five years and pay an annual interest rate of 8 percent. Interest is paid semiannually on January 1
and July 1.
Note: Assume using straight-line amortization of bond discount or premium.
Required:
c. Prepare all worksheet consolidation entries needed to remove the effects of the intercorporate bond ownership in
preparing consolidated financial statements for 20X4.
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