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Several years ago, Brant, Incorporated, sold $960,000 in bonds to the public. Annual cash interest of 9 percent ($86,400) was to be paid on this debt. The bonds were issued at a discount to yield 12 percent. At the beginning of 2022, Zack Corporation (a wholly owned subsidiary of Brant) purchased $120,000 of these bonds on the open market for $141,000, a price based on an effective interest rate of 7 percent. The bond liability had a carrying amount on that date of $820,000. 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 Date December 31, 200 Bonds payable Answer is not complete. Accounts Debit 104,350 Credit

Several years ago, Brant, Incorporated, sold $960,000 in bonds to the public. Annual cash interest of 9 percent ($86,400) was to be paid on this debt. The bonds were issued at a discount to yield 12 percent. At the beginning of 2022, Zack Corporation (a wholly owned subsidiary of Brant) purchased $120,000 of these bonds on the open market for $141,000, a price based on an effective interest rate of 7 percent. The bond liability had a carrying amount on that date of $820,000. 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 Date December 31, 200 Bonds payable Answer is not complete. Accounts Debit 104,350 Credit

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, Incorporated, sold $960,000 in bonds to the public. Annual cash interest of 9 percent ($86,400) was to be paid on this debt. The bonds were issued at a discount to yield 12 percent. At the beginning of 2022, Zack Corporation (a wholly owned subsidiary of Brant) purchased $120,000 of these bonds on the open market for $141,000, a price based on an effective interest rate of 7 percent. The bond liability had a carrying amount on that date of $820,000. 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 fleld. Round your Intermediate calculations and final answers to nearest whole number. No 1 2 Date December 31, 202 Bonds payable Interest income Loss on retirement of debt Investment in bonds Interest expense December 31, 202 Bonds payable Interest income Investment in Zack Answer is not complete. Accounts Investment in bonds Interest expense 333 33333 Debit 104,350 x 9.870 38,500 9.735 Credit 138,870 x 18,600 X 138,010
Transcribed Image Text:Several years ago, Brant, Incorporated, sold $960,000 in bonds to the public. Annual cash interest of 9 percent ($86,400) was to be paid on this debt. The bonds were issued at a discount to yield 12 percent. At the beginning of 2022, Zack Corporation (a wholly owned subsidiary of Brant) purchased $120,000 of these bonds on the open market for $141,000, a price based on an effective interest rate of 7 percent. The bond liability had a carrying amount on that date of $820,000. 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 fleld. Round your Intermediate calculations and final answers to nearest whole number. No 1 2 Date December 31, 202 Bonds payable Interest income Loss on retirement of debt Investment in bonds Interest expense December 31, 202 Bonds payable Interest income Investment in Zack Answer is not complete. Accounts Investment in bonds Interest expense 333 33333 Debit 104,350 x 9.870 38,500 9.735 Credit 138,870 x 18,600 X 138,010
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