Intercompany bond transactionSing Co. Acquired 75% interest in Dance Co. b.outstanding bonds of Sing Co. from the open market for P250,000.On December 31, 20x1, Dance, Inc. purchased all of theThere were no other intercompany transactions during the year.4. On January 1, 20x1, Sing Co. acquired 75% interest in DanceI The year-end individual financial statements show the followingcarrying amount of P200,000, equal to fair value, Non-controlling interest was measured using the proportionateCo. On this date, Sing Co.'s net identifiable assets have aaltributable to the owners of the parent and attributable toConsolidated profit for the year broken down into amountsnon-controlling interests.share method,information:waSing Co.Dance Co.ASSETSInvestment in subsidiary (at cost)180,000250,00050,000300,000Investment in bondsOther assetsTOTAL ASSETS0000500,000680,000LIABILITIES AND EQUITY00Accounts payable40,00030,000 Chapter234Bonds payable (at face amount).Total liabilities300,000340,000200,000Share capitalRetained earningsTotal equityTOTAL LIABILITIES AND EQUITY140,000340,000680,00030,01000017019)270,0300,000Sing Co.300,000Dance C120,00(100,00(217,000)(3,000)80,000RevenuesOperating expensesInterest expenseProfit for the year20,00Requirements:a. Compute for the gain (loss) on extinguishment of bonds trecognized in the 20x1 consolidated statement of profit orb. Compute for the consolidated total bonds payable.c. Prepare a draft of the 20x1 consolidated statement of finaposition and statement of profit or loss.

Debts: Debt can be defined as the money borrowed by the business entity from any financial…

Requirements: a. Compute for the gain (loss) on extinguishment of bonds recognized in the 20x1 consolidated statement of profit or b. Compute for the consolidated total bonds payable. c. Prepare a draft of the 20x1 consolidated statement of fina position and statement of profit or loss.

Requirements: a. Compute for the gain (loss) on extinguishment of bonds recognized in the 20x1 consolidated statement of profit or b. Compute for the consolidated total bonds payable. c. Prepare a draft of the 20x1 consolidated statement of fina position and statement of profit or loss.

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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Intercompany Bond Transactions:
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