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Several years ago Brant, Inc., sold $880,000 in bonds to the public. Annual cash interest of 8 percent ($70,400) was to be paid on th debt. The bonds were issued at a discount to yield 12 percent. At the beginning of 2019, Zack Corporation (a wholly owned subsidia of Brant) purchased $110,000 of these bonds on the open market for $131,000, a price based on an effective interest rate of 6 perce The bond liability had a carrying amount on that date of $740,000. Assume Brant uses the equity method to account internally for its investment in Zack. a. & b. What consolidation entry would be required for these bonds on December 31, 2019 and December 31, 2021? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate calculations and final answers to nearest whole number.) view transaction list Consolidation Worksheet Entries 1 2 Prepare Consolidation Entry B to account for these bonds on December 31, 2019. Note: Enter debits before credits. Date December 31, 2019 Record entry Accounts Clear entry Debit Credit view consolidation entries A

Several years ago Brant, Inc., sold $880,000 in bonds to the public. Annual cash interest of 8 percent ($70,400) was to be paid on th debt. The bonds were issued at a discount to yield 12 percent. At the beginning of 2019, Zack Corporation (a wholly owned subsidia of Brant) purchased $110,000 of these bonds on the open market for $131,000, a price based on an effective interest rate of 6 perce The bond liability had a carrying amount on that date of $740,000. Assume Brant uses the equity method to account internally for its investment in Zack. a. & b. What consolidation entry would be required for these bonds on December 31, 2019 and December 31, 2021? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate calculations and final answers to nearest whole number.) view transaction list Consolidation Worksheet Entries 1 2 Prepare Consolidation Entry B to account for these bonds on December 31, 2019. Note: Enter debits before credits. Date December 31, 2019 Record entry Accounts Clear entry Debit Credit view consolidation entries A

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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Several years ago Brant, Inc., sold $880,000 in bonds to the public. Annual cash interest of 8 percent ($70,400) was to be paid on this debt. The bonds were issued at a discount to yield 12 percent. At the beginning of 2019, Zack Corporation (a wholly owned subsidiary of Brant) purchased $110,000 of these bonds on the open market for $131,000, a price based on an effective interest rate of 6 percent. The bond liability had a carrying amount on that date of $740,000. Assume Brant uses the equity method to account internally for its investment in Zack. a. & b. What consolidation entry would be required for these bonds on December 31, 2019 and December 31, 2021? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate calculations and final answers to nearest whole number.) view transaction list Consolidation Worksheet Entries < 1 Prepare Consolidation Entry B to account for these bonds on December 31, 2019. 2 Note: Enter debits before credits. Date December 31, 2019 Record entry Accounts Clear entry Debit Credit view consolidation entries
Transcribed Image Text:Several years ago Brant, Inc., sold $880,000 in bonds to the public. Annual cash interest of 8 percent ($70,400) was to be paid on this debt. The bonds were issued at a discount to yield 12 percent. At the beginning of 2019, Zack Corporation (a wholly owned subsidiary of Brant) purchased $110,000 of these bonds on the open market for $131,000, a price based on an effective interest rate of 6 percent. The bond liability had a carrying amount on that date of $740,000. Assume Brant uses the equity method to account internally for its investment in Zack. a. & b. What consolidation entry would be required for these bonds on December 31, 2019 and December 31, 2021? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate calculations and final answers to nearest whole number.) view transaction list Consolidation Worksheet Entries < 1 Prepare Consolidation Entry B to account for these bonds on December 31, 2019. 2 Note: Enter debits before credits. Date December 31, 2019 Record entry Accounts Clear entry Debit Credit view consolidation entries
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