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SUB is an 80% owned subsidiary of PAR. SUB issued $100,000 of 8%, 10-year bonds for $95,000 on 1/1/2011. Annual interest is paid on 12/31/. PAR purchased the bonds on 1/1/2017, for $102,000. Both companies use the straight-line method to amortize the premium/discount on the bonds. 1) How much gain or loss on retirement should be reported in 2017 consolidated statements?   Select one: a. 2,000 loss b. 0 c. 4,000 loss d. 2,000 gain       2) The elimination and adjustment process for 2017 consolidated statements include: Select one: a. Credit Investment in Subsidiary Bond 102,000 b. Credit Interest Expense 8,000 c. Debit Interest Revenue 7,500 d. Credit Discount 500 Clear my choice

SUB is an 80% owned subsidiary of PAR. SUB issued $100,000 of 8%, 10-year bonds for $95,000 on 1/1/2011. Annual interest is paid on 12/31/. PAR purchased the bonds on 1/1/2017, for $102,000. Both companies use the straight-line method to amortize the premium/discount on the bonds. 1) How much gain or loss on retirement should be reported in 2017 consolidated statements?   Select one: a. 2,000 loss b. 0 c. 4,000 loss d. 2,000 gain       2) The elimination and adjustment process for 2017 consolidated statements include: Select one: a. Credit Investment in Subsidiary Bond 102,000 b. Credit Interest Expense 8,000 c. Debit Interest Revenue 7,500 d. Credit Discount 500 Clear my choice

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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SUB is an 80% owned subsidiary of PAR. SUB issued $100,000 of 8%, 10-year bonds for $95,000 on 1/1/2011. Annual interest is paid on 12/31/. PAR purchased the bonds on 1/1/2017, for $102,000. Both companies use the straight-line method to amortize the premium/discount on the bonds.

1) How much gain or loss on retirement should be reported in 2017 consolidated statements?


 

Select one:
a. 2,000 loss
b. 0
c. 4,000 loss
d. 2,000 gain
 
 
 
2)

The elimination and adjustment process for 2017 consolidated statements include:

Select one:
a. Credit Investment in Subsidiary Bond 102,000
b. Credit Interest Expense 8,000
c. Debit Interest Revenue 7,500
d. Credit Discount 500
Clear my choice
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