ADVANCED FINANCIAL ACCOUNTING-ACCESS
12th Edition
ISBN: 9781260518740
Author: Christensen
Publisher: MCG
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Chapter 4, Problem 4.7E
1.
To determine
Introduction: Consolidation is the merger or acquisition of small companies into a single large one. In financial accounting, consolidation means aggregation of financial statement of a group company or different entities and reported at group level.
To prepare:
2.
To determine
Introduction: Consolidation is the merger or acquisition of small companies into a single large one. In financial accounting, consolidation means aggregation of financial statement of a group company or different entities and reported at group level.
To prepare: Balance in Investment Account
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Gonzalez Company acquired $177,000 of Walker Co., 8% bonds on May 1 at their face amount. Interest is paid semiannually on May 1 and November 1. On November 1, Gonzalez Company sold $45,600 of the bonds for 97.
Journalize entries to record the following in Year 1:
For a compound transaction, if an amount box does not require an entry, leave it blank.
a. The initial acquisition of the bonds on May 1.
May 1
Investments-Walker Co. Bonds
Cash
Feedback
a. Record the investment at par and the cash paid.
b. The semiannual interest received on November 1.
Nov. 1
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Tanner-UNF Corporation acquired as a long-term investment $200 million of 6% bonds, dated July 1, 2024. Assume Tanner-UNF
management is holding the bonds in a trading portfolio. Tanner-UNF paid $200 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 $210 million.
Required:
1. to 3. Prepare the journal entry to record Tanner-UNF's investment in the bonds on July 1, 2024, interest on December 31, 2024, at
the effective (market) rate and the fair value adjustment at December 31.
4. Suppose Moody's bond rating agency downgraded the risk rating of the bonds motiving Tanner-UNF to sell the investment on
January 2, 2025, for $190 million. Prepare the journal entry to record the sale.
Comple this question by entering your wers in the tabs below.
Req 1 to 3
Suppose Moody's bond rating agency downgraded the risk rating of the bonds motiving Tanner-UNF to…
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Chapter 4 Solutions
ADVANCED FINANCIAL ACCOUNTING-ACCESS
Ch. 4 - When is the carrying value of the investment...Ch. 4 - What is a differential? How is a differential...Ch. 4 - Prob. 4.3QCh. 4 - Prob. 4.4QCh. 4 - Prob. 4.5QCh. 4 - Prob. 4.6QCh. 4 - Prob. 4.7QCh. 4 - Prob. 4.8QCh. 4 - Prob. 4.9QCh. 4 - Prob. 4.10Q
Ch. 4 - Prob. 4.11QCh. 4 - What determines whether the balance assigned to...Ch. 4 - What does the termpushdown accountingmean?Ch. 4 - Under what conditions is push-down accounting...Ch. 4 - Prob. 4.15QCh. 4 - Prob. 4.2CCh. 4 - Prob. 4.3CCh. 4 - Prob. 4.4CCh. 4 - Prob. 4.1ECh. 4 - Prob. 4.2ECh. 4 - Prob. 4.3ECh. 4 - Prob. 4.4ECh. 4 - Prob. 4.5ECh. 4 - Prob. 4.6ECh. 4 - Prob. 4.7ECh. 4 - Prob. 4.8ECh. 4 - Prob. 4.9ECh. 4 - Prob. 4.10.1ECh. 4 - Prob. 4.10.2ECh. 4 - Prob. 4.10.3ECh. 4 - Prob. 4.10.4ECh. 4 - Prob. 4.10.5ECh. 4 - Prob. 4.11.1ECh. 4 - Prob. 4.11.2ECh. 4 - Prob. 4.11.3ECh. 4 - Prob. 4.11.4ECh. 4 - Prob. 4.12ECh. 4 - Prob. 4.13ECh. 4 - Prob. 4.14ECh. 4 - Prob. 4.15ECh. 4 - Prob. 4.16ECh. 4 - Prob. 4.17ECh. 4 - Prob. 4.18.1ECh. 4 - Prob. 4.18.2ECh. 4 - Prob. 4.18.3ECh. 4 - Prob. 4.18.4ECh. 4 - Prob. 4.18.5ECh. 4 - Prob. 4.18.6ECh. 4 - Prob. 4.19ECh. 4 - Prob. 4.20ECh. 4 - Prob. 4.21ECh. 4 - Prob. 4.22ECh. 4 - Prob. 4.23ECh. 4 - Prob. 4.24AECh. 4 - Prob. 4.25PCh. 4 - Prob. 4.26PCh. 4 - Prob. 4.27PCh. 4 - Consolidated Balance Sheet Powder Company spent...Ch. 4 - Prob. 4.29PCh. 4 - Prob. 4.30PCh. 4 - Prob. 4.31PCh. 4 - Prob. 4.32PCh. 4 - Prob. 4.33PCh. 4 - Prob. 4.34PCh. 4 - Prob. 4.35PCh. 4 - Prob. 4.36PCh. 4 - Prob. 4.37AP
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