School Perfume Company issued $300,000 of 10 percent bonds on January 1, 20X2, at 110. The bonds mature 10 years from issue and have semiannual interest payments on January 1 and July 1. Parsons Corporation owns 80 percent of School Perfume stock. On January 1, 20X4, Parsons purchased $100,000 par value of School Perfume bonds in the securities markets for $106,200. Partial trial balances for the two companies on December 31, 20X4, are as follows: Parsons School Perfume Corporation $105,640 9,440 5,000 Company Investment in School Perfume Company Bonds Interest Income Interest Receivable $ 300,000 23,447 27,632 15,000 Bonds Payable Bond Premium Interest Expense Interest Payable Required: Prepare the necessary worksheet consolidation entries as of December 31, 20X4, to remove the effects of the intercorporate bond ownership. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round Vour intermediate calculations. Round vour final answers to nearest whole dollar)

School Perfume Company issued $300,000 of 10 percent bonds on January 1, 20X2, at 110. The bonds mature 10 years from issue and have semiannual interest payments on January 1 and July 1. Parsons Corporation owns 80 percent of School Perfume stock. On January 1, 20X4, Parsons purchased $100,000 par value of School Perfume bonds in the securities markets for $106,200. Partial trial balances for the two companies on December 31, 20X4, are as follows: Parsons School Perfume Corporation $105,640 9,440 5,000 Company Investment in School Perfume Company Bonds Interest Income Interest Receivable $ 300,000 23,447 27,632 15,000 Bonds Payable Bond Premium Interest Expense Interest Payable Required: Prepare the necessary worksheet consolidation entries as of December 31, 20X4, to remove the effects of the intercorporate bond ownership. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round Vour intermediate calculations. Round vour final answers to nearest whole dollar)

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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