What was the effect of W's purchase of XYZ's bond on the retained earnings amount reported in XYZ's March 31, year 1 consolidated balance sheet
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ABC Company, a holder of P1,000,000 XYZ Company bonds, collected the interest due on March 31, year 1, and then sold the bonds to W, Inc. for P975,000. On that date, XYZ. a 75% owner of W had P1.075.000 carrying amount for the bonds.
What was the effect of W's purchase of XYZ's bond on the
The answer is 10
0,000 increase. Can you please show me how it was solved?
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- On November 1, 2015, Journeyman, LLC purchased 900 of the $1,000 face value, 9% bonds of Celebration Incorporated, for $948,000, including accrued interest of $13,500. The bonds matured on January 1, 2017, and interest was paid on March 1 and September 1. If Journeyman uses the straight-line method of amortization and the bonds are classified as available-for-sale, how should the net carrying value of the bonds be shown on Journeyman’s December 31, 2015 balance sheet?Cullumber Company purchased $3050000 of 9%, 5-year bonds from Vaughn, Inc. on January 1, 2021, with interest payable on July 1 and January 1. The bonds sold for $3173740 at an effective interest rate of 8%. Using the effective-interest method, Cullumber Company decreased the Available-for-Sale Debt Securities account for the Vaughn, Inc. bonds on July 1, 2021 and December 31, 2021 by the amortized premiums of $10720 and $11080, respectively.At April 1, 2022, Cullumber Company sold the Vaughn bonds for $3140000. After accruing for interest, the carrying value of the Vaughn bonds on April 1, 2022 was $3147440. Assuming Cullumber Company has a portfolio of Available-for-Sale Debt Securities, what should Cullumber Company report as a gain or loss on the bonds? $-7440. $-123740. $-21800. $ 0.On August 1, 2011, Airport Company sold Paxton Company $1,000,000 of 10-year, 6% bonds, dated July 1 at 100 plus accrued interest. On March 1, 2012, Paxton sold half of the bonds for $520,000 plus accrued interest. Present entries to record the following transactions: Paxton Company: (1) Purchase of bonds on August 1, 2011. (2) Receipt of first semiannual interest amount on December 31, 2011. (3) The sale of the bonds on March 1, 2012.
- Panda Company acquired a $20,000 bond originally issued by its 75%-owned subsidiary on January 2, 2015. The bond was issued in a prior year for $21,250, matures January 1, 2020, and pays 8% interest at December 31. The bond's book value at January 2, 2015 is $20,625, and Panda paid $18,500 to purchase it. Straight-line amortization is used by both companies. How much interest income should be eliminated in 2015?Tanner-UNF Corporation acquired as a long-term investment $180 million of 7.0% bonds, dated July 1, on July 1, 2024. Company management has the positive intent and ability to hold the bonds until maturity. The market interest rate (yield) was 9% for bonds of similar risk and maturity. Tanner-UNF paid $160.0 million for the bonds. The company will receive interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the bonds at December 31, 2024, was $160.0 million. Required: 1. & 2. Prepare the journal entry to record Tanner-UNF's investment in the bonds on July 1, 2024 and interest on December 31, 2024, a the effective (market) rate. 3. At what amount will Tanner-UNF report its investment in the December 31, 2024, balance sheet? 4. Suppose Moody's bond rating agency downgraded the risk rating of the bonds motivating Tanner-UNF to sell the investment on January 2, 2025, for $130.0 million. Prepare the journal entry to record the sale.…On 1/1/2019, Allie Company issued bonds payable of $500,000 at 8%. It was sold at $464,000 with effective interest rate of 9%. On 1/1/2020, Choco purchased all of Allie's bond for $532,000 cash with effective interest at 7% and Allie's bonds payable has been effectively retired. 3) Compute the consolidated gain or loss on a consolidated income statement for at the end of 2020
- Sheridan Company purchased $1250000 of 8 %, 5-year bonds from Pina, Inc. on January 1, 2025, with interest payable on July 1 and January 1. The bonds sold for $1299896 at an effective interest rate of 7%. Using the effective interest method, Sheridan decreased the Available for - Sale Debt Securities account for the Pina bonds on July 1, 2025 and December 31, 2025 by the amortized premiums of $4748 and $4892, respectively. At December 31, 2025, the fair value of the Pina bonds was $1317000. What should Sheridan report as other comprehensive income and as a separate component of stockholders' equity (assuming that this is Sheridan's first investment in available - for - sale debt securities)? Select answer from the options below $0 $26744 $9640 $17104Mills Corporation acquired as a long-term investment $240 million of 6% bonds, dated July 1, on July 1, 2021. Company management has the positive intent and ability to hold the bonds until maturity. The market interest rate (yield) was 4% for bonds of similar risk and maturity. Mills paid $280 million for the bonds. The company will receive interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the bonds at December 31, 2021, was $270 million. Required:1. Prepare the journal entry to record Mills’ investment in the bonds on July 1, 2021.2. Prepare the journal entry by Mills to record interest on December 31, 2021, at the effective (market) rate. 3. At what amount will Mills report its investment in the December 31, 2021, balance sheet? Why?4. Suppose Moody’s bond rating agency upgraded the risk rating of the bonds, and Mills decided to sell the investment on January 2, 2022, for $290 million. Prepare the journal entry to record…Mills Corporation acquired as a long-term investment $250 million of 8% bonds, dated July 1, on July 1, 2021. Company management has classified the bonds as an available-for-sale investment. The market interest rate (yield) was 6% for bonds of similar risk and maturity. Mills paid $290 million for the bonds. The company will receive interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the bonds at December 31, 2021, was $270 million. Required:1. & 2. Prepare the journal entry to record Mills’ investment in the bonds on July 1, 2021 and interest on December 31, 2021, at the effective (market) rate.3. At what amount will Mills report its investment in the December 31, 2021, balance sheet?4. Suppose Moody's bond rating agency upgraded the risk rating of the bonds, and Mills decided to sell the investment on January 2, 2022, for $300 million. Prepare the journal entries required on the date of sale.
- Parilo Company acquired $183,600 of Makofske Company, 6% bonds on May 1, 20Y5, at their face amount. Interest is paid semiannually on May 1 and November 1. On November 1, 20Y5, Parilo sold $52,200 of the bonds for 96. Journalize the entries to record the following under the cost method:Crane Company purchased $1190000 of 8%, 5-year bonds from Carlin, Inc. on January 1, 2021, with interest payable on July 1 and January 1. The bonds sold for $1239996 at an effective interest rate of 7%. Using the effective interest method, Crane Company decreased the Available-for-Sale Debt Securities account for the Carlin, Inc. bonds on July 1, 2021 and December 31, 2021 by the amortized premiums of $4148 and $4292, respectively.At February 1, 2022, Crane Company sold the Carlin bonds for $1225900. After accruing for interest, the carrying value of the Carlin bonds on February 1, 2022 was $1230500. Assuming Crane Company has a portfolio of available-for-sale debt investments, what should Crane Company report as a gain (or loss) on the bonds? $0. $-14096. $-4600. $-9496.Presented below are two independent situations. (a) Oriole Co. sold $1,840,000 of 12%, 10-year bonds at 105 on January 1, 2020. The bonds were dated January 1, 2020, and pay interest on July 1 and January 1. If Oriole uses the straight-line method to amortize bond premium or discount, determine the amount of interest expense to be reported on July 1, 2020, and December 31, 2020. (Round answer to O decimal places, e.g. 38,548.) Interest expense to be recorded $ (b) Waterway Inc. issued $540,000 of 9%, 10-year bonds on June 30, 2020, for $447,091. This price provided a yield of 12% on the bonds. Interest is payable semiannually on December 31 and June 30. If Waterway uses the effective-interest method, determine the amount of interest expense to record if financial statements are issued on October 31, 2020. (Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to 0 decimal places, e.g. 38,548.) Interest expense to be recorded $
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