Compute the amount of gain or loss on the constructive retirement of the bond reported in the consolidated income statement assuming the straight line amortization. a. P issues directly to S bonds that have a par value of $100,000. S paid $95,000 for the bonds. The term of the bonds is 10 years and they have an 8 percent stated interest rate. Interest is paid annually on December 31. b. P issues to an unaffiliated company bonds that have a par value of $100,000. The unaffiliated company paid par value for the bonds. Four years later, S paid $60,000 for 60 percent of the outstanding bonds. The bond term is 10 years and they have an 8 percent stated interest rate. Interest is paid annually on December 31. c. P issues to an unaffiliated company bonds that have a par value of $100,000. The unaffiliated company paid 105 percent of par value for the bonds. Four years later, S paid $96,000 for all of the outstanding bonds. The bond term is 10 years and they have an 8 percent stated interest rate. Interest is paid annually on December 31. d. S issues to an unaffiliated company bonds that have a par value of $100,000. The unaffiliated company paid 95 percent of par value for the bonds. Four years later, P paid $82,000 for 80 percent of the outstanding bonds. The bond term is 10 years and they have an 8 percent stated interest rate. Interest is paid annually on December 31. e. How would your answers to parts (a) through (d) change if the Parent company owned 90 percent of the Subsidiary instead of 100 percent?

Question

Want to see the full answer?

Answer 1

Question

Chapter 6, Problem 54E

To determine

Compute the amount of gain or loss on the constructive retirement of the bond reported in the consolidated income statement assuming the straight line amortization.

a. P issues directly to S bonds that have a par value of $100,000. S paid $95,000 for the bonds. The term of the bonds is 10 years and they have an 8 percent stated interest rate. Interest is paid annually on December 31.

b. P issues to an unaffiliated company bonds that have a par value of $100,000. The unaffiliated company paid par value for the bonds. Four years later, S paid $60,000 for 60 percent of the outstanding bonds. The bond term is 10 years and they have an 8 percent stated interest rate. Interest is paid annually on December 31.

c. P issues to an unaffiliated company bonds that have a par value of $100,000. The unaffiliated company paid 105 percent of par value for the bonds. Four years later, S paid $96,000 for all of the outstanding bonds. The bond term is 10 years and they have an 8 percent stated interest rate. Interest is paid annually on December 31.

d. S issues to an unaffiliated company bonds that have a par value of $100,000. The unaffiliated company paid 95 percent of par value for the bonds. Four years later, P paid $82,000 for 80 percent of the outstanding bonds. The bond term is 10 years and they have an 8 percent stated interest rate. Interest is paid annually on December 31.

e. How would your answers to parts (a) through (d) change if the Parent company owned 90 percent of the Subsidiary instead of 100 percent?

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Hi expert provide answer

Financial Accounting Question

general accounting

Answer 2

Question

Chapter 6, Problem 54E

To determine

Compute the amount of gain or loss on the constructive retirement of the bond reported in the consolidated income statement assuming the straight line amortization.

a. P issues directly to S bonds that have a par value of $100,000. S paid $95,000 for the bonds. The term of the bonds is 10 years and they have an 8 percent stated interest rate. Interest is paid annually on December 31.

b. P issues to an unaffiliated company bonds that have a par value of $100,000. The unaffiliated company paid par value for the bonds. Four years later, S paid $60,000 for 60 percent of the outstanding bonds. The bond term is 10 years and they have an 8 percent stated interest rate. Interest is paid annually on December 31.

c. P issues to an unaffiliated company bonds that have a par value of $100,000. The unaffiliated company paid 105 percent of par value for the bonds. Four years later, S paid $96,000 for all of the outstanding bonds. The bond term is 10 years and they have an 8 percent stated interest rate. Interest is paid annually on December 31.

d. S issues to an unaffiliated company bonds that have a par value of $100,000. The unaffiliated company paid 95 percent of par value for the bonds. Four years later, P paid $82,000 for 80 percent of the outstanding bonds. The bond term is 10 years and they have an 8 percent stated interest rate. Interest is paid annually on December 31.

e. How would your answers to parts (a) through (d) change if the Parent company owned 90 percent of the Subsidiary instead of 100 percent?

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 6, Problem 54E

To determine

Compute the amount of gain or loss on the constructive retirement of the bond reported in the consolidated income statement assuming the straight line amortization.

a. P issues directly to S bonds that have a par value of $100,000. S paid $95,000 for the bonds. The term of the bonds is 10 years and they have an 8 percent stated interest rate. Interest is paid annually on December 31.

b. P issues to an unaffiliated company bonds that have a par value of $100,000. The unaffiliated company paid par value for the bonds. Four years later, S paid $60,000 for 60 percent of the outstanding bonds. The bond term is 10 years and they have an 8 percent stated interest rate. Interest is paid annually on December 31.

c. P issues to an unaffiliated company bonds that have a par value of $100,000. The unaffiliated company paid 105 percent of par value for the bonds. Four years later, S paid $96,000 for all of the outstanding bonds. The bond term is 10 years and they have an 8 percent stated interest rate. Interest is paid annually on December 31.

d. S issues to an unaffiliated company bonds that have a par value of $100,000. The unaffiliated company paid 95 percent of par value for the bonds. Four years later, P paid $82,000 for 80 percent of the outstanding bonds. The bond term is 10 years and they have an 8 percent stated interest rate. Interest is paid annually on December 31.

e. How would your answers to parts (a) through (d) change if the Parent company owned 90 percent of the Subsidiary instead of 100 percent?

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 6, Problem 54E

To determine

Compute the amount of gain or loss on the constructive retirement of the bond reported in the consolidated income statement assuming the straight line amortization.

a. P issues directly to S bonds that have a par value of $100,000. S paid $95,000 for the bonds. The term of the bonds is 10 years and they have an 8 percent stated interest rate. Interest is paid annually on December 31.

b. P issues to an unaffiliated company bonds that have a par value of $100,000. The unaffiliated company paid par value for the bonds. Four years later, S paid $60,000 for 60 percent of the outstanding bonds. The bond term is 10 years and they have an 8 percent stated interest rate. Interest is paid annually on December 31.

c. P issues to an unaffiliated company bonds that have a par value of $100,000. The unaffiliated company paid 105 percent of par value for the bonds. Four years later, S paid $96,000 for all of the outstanding bonds. The bond term is 10 years and they have an 8 percent stated interest rate. Interest is paid annually on December 31.

d. S issues to an unaffiliated company bonds that have a par value of $100,000. The unaffiliated company paid 95 percent of par value for the bonds. Four years later, P paid $82,000 for 80 percent of the outstanding bonds. The bond term is 10 years and they have an 8 percent stated interest rate. Interest is paid annually on December 31.

e. How would your answers to parts (a) through (d) change if the Parent company owned 90 percent of the Subsidiary instead of 100 percent?

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 6, Problem 54E

To determine

Compute the amount of gain or loss on the constructive retirement of the bond reported in the consolidated income statement assuming the straight line amortization.

a. P issues directly to S bonds that have a par value of $100,000. S paid $95,000 for the bonds. The term of the bonds is 10 years and they have an 8 percent stated interest rate. Interest is paid annually on December 31.

b. P issues to an unaffiliated company bonds that have a par value of $100,000. The unaffiliated company paid par value for the bonds. Four years later, S paid $60,000 for 60 percent of the outstanding bonds. The bond term is 10 years and they have an 8 percent stated interest rate. Interest is paid annually on December 31.

c. P issues to an unaffiliated company bonds that have a par value of $100,000. The unaffiliated company paid 105 percent of par value for the bonds. Four years later, S paid $96,000 for all of the outstanding bonds. The bond term is 10 years and they have an 8 percent stated interest rate. Interest is paid annually on December 31.

d. S issues to an unaffiliated company bonds that have a par value of $100,000. The unaffiliated company paid 95 percent of par value for the bonds. Four years later, P paid $82,000 for 80 percent of the outstanding bonds. The bond term is 10 years and they have an 8 percent stated interest rate. Interest is paid annually on December 31.

e. How would your answers to parts (a) through (d) change if the Parent company owned 90 percent of the Subsidiary instead of 100 percent?

Answer 6

Chapter 6, Problem 54E

To determine

Compute the amount of gain or loss on the constructive retirement of the bond reported in the consolidated income statement assuming the straight line amortization.

a. P issues directly to S bonds that have a par value of $100,000. S paid $95,000 for the bonds. The term of the bonds is 10 years and they have an 8 percent stated interest rate. Interest is paid annually on December 31.

b. P issues to an unaffiliated company bonds that have a par value of $100,000. The unaffiliated company paid par value for the bonds. Four years later, S paid $60,000 for 60 percent of the outstanding bonds. The bond term is 10 years and they have an 8 percent stated interest rate. Interest is paid annually on December 31.

c. P issues to an unaffiliated company bonds that have a par value of $100,000. The unaffiliated company paid 105 percent of par value for the bonds. Four years later, S paid $96,000 for all of the outstanding bonds. The bond term is 10 years and they have an 8 percent stated interest rate. Interest is paid annually on December 31.

d. S issues to an unaffiliated company bonds that have a par value of $100,000. The unaffiliated company paid 95 percent of par value for the bonds. Four years later, P paid $82,000 for 80 percent of the outstanding bonds. The bond term is 10 years and they have an 8 percent stated interest rate. Interest is paid annually on December 31.

e. How would your answers to parts (a) through (d) change if the Parent company owned 90 percent of the Subsidiary instead of 100 percent?

Answer 7

Chapter 6, Problem 54E

To determine

Compute the amount of gain or loss on the constructive retirement of the bond reported in the consolidated income statement assuming the straight line amortization.

a. P issues directly to S bonds that have a par value of $100,000. S paid $95,000 for the bonds. The term of the bonds is 10 years and they have an 8 percent stated interest rate. Interest is paid annually on December 31.

b. P issues to an unaffiliated company bonds that have a par value of $100,000. The unaffiliated company paid par value for the bonds. Four years later, S paid $60,000 for 60 percent of the outstanding bonds. The bond term is 10 years and they have an 8 percent stated interest rate. Interest is paid annually on December 31.

c. P issues to an unaffiliated company bonds that have a par value of $100,000. The unaffiliated company paid 105 percent of par value for the bonds. Four years later, S paid $96,000 for all of the outstanding bonds. The bond term is 10 years and they have an 8 percent stated interest rate. Interest is paid annually on December 31.

d. S issues to an unaffiliated company bonds that have a par value of $100,000. The unaffiliated company paid 95 percent of par value for the bonds. Four years later, P paid $82,000 for 80 percent of the outstanding bonds. The bond term is 10 years and they have an 8 percent stated interest rate. Interest is paid annually on December 31.

e. How would your answers to parts (a) through (d) change if the Parent company owned 90 percent of the Subsidiary instead of 100 percent?

Answer 8

Expert Solution & Answer

Answer 9

Expert Solution & Answer

Answer 10

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 11

Ch. 6 - Prob. 1Q Ch. 6 - Prob. 2Q Ch. 6 - Prob. 3Q Ch. 6 - Prob. 4Q Ch. 6 - Prob. 5Q Ch. 6 - Prob. 6Q Ch. 6 - Prob. 7Q Ch. 6 - Prob. 8Q Ch. 6 - Prob. 9Q Ch. 6 - Prob. 10Q

Want to see the full answer?

Chapter 6 Solutions