Several years ago, Brant, Incorporated, sold $1,020,000 in bonds to the public. Annual cash interest of 8 percent ($81,600) was to be paid on this debt. The bonds were issued at a discount to yield 10 percent. At the beginning of 2022, Zack Corporation (a wholly owned subsidiary of Brant) purchased $170,000 of these bonds on the open market for $191,000, a price based on an effective interest rate of 6 percent. The bond liability had a carrying amount on that date of $900,000. Assume Brant uses the equity method to account internally for its investment in Zack. Required: a. & b. What consolidation entry would be required for these bonds on December 31, 2022 and December 31, 2024? Note: 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. No 1 2 Date December 31, 202 Bonds payable Answer is not complete. Accounts Loss on retirement of debt Interest income Investment in bonds Interest expense December 31, 202 Bonds payable Interest income Investment in Zack Investment in bonds Interest expense Debit 151,400 41,000 11,460 154,634 186,592 X 186,592 X 186,592 X 186,592 x Credit 188,860 15,000
Several years ago, Brant, Incorporated, sold $1,020,000 in bonds to the public. Annual cash interest of 8 percent ($81,600) was to be paid on this debt. The bonds were issued at a discount to yield 10 percent. At the beginning of 2022, Zack Corporation (a wholly owned subsidiary of Brant) purchased $170,000 of these bonds on the open market for $191,000, a price based on an effective interest rate of 6 percent. The bond liability had a carrying amount on that date of $900,000. Assume Brant uses the equity method to account internally for its investment in Zack. Required: a. & b. What consolidation entry would be required for these bonds on December 31, 2022 and December 31, 2024? Note: 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. No 1 2 Date December 31, 202 Bonds payable Answer is not complete. Accounts Loss on retirement of debt Interest income Investment in bonds Interest expense December 31, 202 Bonds payable Interest income Investment in Zack Investment in bonds Interest expense Debit 151,400 41,000 11,460 154,634 186,592 X 186,592 X 186,592 X 186,592 x Credit 188,860 15,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
A-h2
Transcribed Image Text:Several years ago, Brant, Incorporated, sold $1,020,000 in bonds to the public. Annual cash interest of 8 percent ($81,600) was to be
paid on this debt. The bonds were issued at a discount to yield 10 percent. At the beginning of 2022, Zack Corporation (a wholly
owned subsidiary of Brant) purchased $170,000 of these bonds on the open market for $191,000, a price based on an effective interest
rate of 6 percent. The bond liability had a carrying amount on that date of $900,000. Assume Brant uses the equity method to account
internally for its investment in Zack.
Required:
a. & b. What consolidation entry would be required for these bonds on December 31, 2022 and December 31, 2024?
Note: 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.
No
1
2
Date
December 31, 202 Bonds payable
Loss on retirement of debt
Interest income
Answer is not complete.
Accounts
Investment in bonds
Interest expense
December 31, 202 Bonds payable
Interest income
Investment in Zack
Investment in bonds
Interest expense
Debit
151,400
41,000
11,460
154,634
186,592
186,592
186,592
186,592
Credit
188,860
15,000
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