Intercompany sale of bonds: when a company sells bonds to its subsidiary, all effects of the intercompany indebtedness must be eliminated. A company cannot report an investment in its own bonds to itself. Thus when the consolidated entity is viewed as a single company, all amounts associated with intercompany indebtedness must be eliminated, including investment in bonds, the bonds payable any unamortized discount or premium, the interest income or expenses on the bonds and any accrued interest receivable or payable. Retirement of bonds: when a constrictive retirement occurs, the consolidated income statement for the period reports a gain or loss on retirement, but not reported in consolidated balance sheet. If the company purchases the bond of an affiliate from an unrelated party at a price equal to the liability reported, the elimination entries required to be prepared in consolidated financial statement. The consolidation entries to remove the effects of intercompany bond ownership in preparing consolidated financial statements.

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Answer 1

Question

Chapter 8, Problem 8.8E

To determine

Intercompany sale of bonds: when a company sells bonds to its subsidiary, all effects of the intercompany indebtedness must be eliminated. A company cannot report an investment in its own bonds to itself. Thus when the consolidated entity is viewed as a single company, all amounts associated with intercompany indebtedness must be eliminated, including investment in bonds, the bonds payable any unamortized discount or premium, the interest income or expenses on the bonds and any accrued interest receivable or payable.

Retirement of bonds: when a constrictive retirement occurs, the consolidated income statement for the period reports a gain or loss on retirement, but not reported in consolidated balance sheet. If the company purchases the bond of an affiliate from an unrelated party at a price equal to the liability reported, the elimination entries required to be prepared in consolidated financial statement.

The consolidation entries to remove the effects of intercompany bond ownership in preparing consolidated financial statements.

b

To determine

Intercompany sale of bonds: when a company sells bonds to its subsidiary, all effects of the intercompany indebtedness must be eliminated. A company cannot report an investment in its own bonds to itself. Thus when the consolidated entity is viewed as a single company, all amounts associated with intercompany indebtedness must be eliminated, including investment in bonds, the bonds payable any unamortized discount or premium, the interest income or expenses on the bonds and any accrued interest receivable or payable.

Retirement of bonds: when a constrictive retirement occurs, the consolidated income statement for the period reports a gain or loss on retirement, but not reported in consolidated balance sheet. If the company purchases the bond of an affiliate from an unrelated party at a price equal to the liability reported, the elimination entries required to be prepared in consolidated financial statement.

The consolidation entries to remove the effects of intercompany bond ownership in preparing consolidated financial statements in the next year 20X6.

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Please explain the solution to this financial accounting problem with accurate explanations.

Metro Co. sold inventory for $5,500 to a customer on July 1 with terms 2/10, n/30. On July 9, the customer returned $500 of merchandise. The remaining amount was paid on July 10. What is the amount of cash Metro received?

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Answer 2

Question

Chapter 8, Problem 8.8E

To determine

Intercompany sale of bonds: when a company sells bonds to its subsidiary, all effects of the intercompany indebtedness must be eliminated. A company cannot report an investment in its own bonds to itself. Thus when the consolidated entity is viewed as a single company, all amounts associated with intercompany indebtedness must be eliminated, including investment in bonds, the bonds payable any unamortized discount or premium, the interest income or expenses on the bonds and any accrued interest receivable or payable.

Retirement of bonds: when a constrictive retirement occurs, the consolidated income statement for the period reports a gain or loss on retirement, but not reported in consolidated balance sheet. If the company purchases the bond of an affiliate from an unrelated party at a price equal to the liability reported, the elimination entries required to be prepared in consolidated financial statement.

The consolidation entries to remove the effects of intercompany bond ownership in preparing consolidated financial statements.

b

To determine

Intercompany sale of bonds: when a company sells bonds to its subsidiary, all effects of the intercompany indebtedness must be eliminated. A company cannot report an investment in its own bonds to itself. Thus when the consolidated entity is viewed as a single company, all amounts associated with intercompany indebtedness must be eliminated, including investment in bonds, the bonds payable any unamortized discount or premium, the interest income or expenses on the bonds and any accrued interest receivable or payable.

Retirement of bonds: when a constrictive retirement occurs, the consolidated income statement for the period reports a gain or loss on retirement, but not reported in consolidated balance sheet. If the company purchases the bond of an affiliate from an unrelated party at a price equal to the liability reported, the elimination entries required to be prepared in consolidated financial statement.

The consolidation entries to remove the effects of intercompany bond ownership in preparing consolidated financial statements in the next year 20X6.

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Answer 3

Question

Chapter 8, Problem 8.8E

To determine

Intercompany sale of bonds: when a company sells bonds to its subsidiary, all effects of the intercompany indebtedness must be eliminated. A company cannot report an investment in its own bonds to itself. Thus when the consolidated entity is viewed as a single company, all amounts associated with intercompany indebtedness must be eliminated, including investment in bonds, the bonds payable any unamortized discount or premium, the interest income or expenses on the bonds and any accrued interest receivable or payable.

Retirement of bonds: when a constrictive retirement occurs, the consolidated income statement for the period reports a gain or loss on retirement, but not reported in consolidated balance sheet. If the company purchases the bond of an affiliate from an unrelated party at a price equal to the liability reported, the elimination entries required to be prepared in consolidated financial statement.

The consolidation entries to remove the effects of intercompany bond ownership in preparing consolidated financial statements.

b

To determine

Intercompany sale of bonds: when a company sells bonds to its subsidiary, all effects of the intercompany indebtedness must be eliminated. A company cannot report an investment in its own bonds to itself. Thus when the consolidated entity is viewed as a single company, all amounts associated with intercompany indebtedness must be eliminated, including investment in bonds, the bonds payable any unamortized discount or premium, the interest income or expenses on the bonds and any accrued interest receivable or payable.

Retirement of bonds: when a constrictive retirement occurs, the consolidated income statement for the period reports a gain or loss on retirement, but not reported in consolidated balance sheet. If the company purchases the bond of an affiliate from an unrelated party at a price equal to the liability reported, the elimination entries required to be prepared in consolidated financial statement.

The consolidation entries to remove the effects of intercompany bond ownership in preparing consolidated financial statements in the next year 20X6.

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Answer 4

Question

Chapter 8, Problem 8.8E

To determine

Intercompany sale of bonds: when a company sells bonds to its subsidiary, all effects of the intercompany indebtedness must be eliminated. A company cannot report an investment in its own bonds to itself. Thus when the consolidated entity is viewed as a single company, all amounts associated with intercompany indebtedness must be eliminated, including investment in bonds, the bonds payable any unamortized discount or premium, the interest income or expenses on the bonds and any accrued interest receivable or payable.

Retirement of bonds: when a constrictive retirement occurs, the consolidated income statement for the period reports a gain or loss on retirement, but not reported in consolidated balance sheet. If the company purchases the bond of an affiliate from an unrelated party at a price equal to the liability reported, the elimination entries required to be prepared in consolidated financial statement.

The consolidation entries to remove the effects of intercompany bond ownership in preparing consolidated financial statements.

b

To determine

Intercompany sale of bonds: when a company sells bonds to its subsidiary, all effects of the intercompany indebtedness must be eliminated. A company cannot report an investment in its own bonds to itself. Thus when the consolidated entity is viewed as a single company, all amounts associated with intercompany indebtedness must be eliminated, including investment in bonds, the bonds payable any unamortized discount or premium, the interest income or expenses on the bonds and any accrued interest receivable or payable.

Retirement of bonds: when a constrictive retirement occurs, the consolidated income statement for the period reports a gain or loss on retirement, but not reported in consolidated balance sheet. If the company purchases the bond of an affiliate from an unrelated party at a price equal to the liability reported, the elimination entries required to be prepared in consolidated financial statement.

The consolidation entries to remove the effects of intercompany bond ownership in preparing consolidated financial statements in the next year 20X6.

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Answer 5

Chapter 8, Problem 8.8E

To determine

Intercompany sale of bonds: when a company sells bonds to its subsidiary, all effects of the intercompany indebtedness must be eliminated. A company cannot report an investment in its own bonds to itself. Thus when the consolidated entity is viewed as a single company, all amounts associated with intercompany indebtedness must be eliminated, including investment in bonds, the bonds payable any unamortized discount or premium, the interest income or expenses on the bonds and any accrued interest receivable or payable.

Retirement of bonds: when a constrictive retirement occurs, the consolidated income statement for the period reports a gain or loss on retirement, but not reported in consolidated balance sheet. If the company purchases the bond of an affiliate from an unrelated party at a price equal to the liability reported, the elimination entries required to be prepared in consolidated financial statement.

The consolidation entries to remove the effects of intercompany bond ownership in preparing consolidated financial statements.

b

To determine

Intercompany sale of bonds: when a company sells bonds to its subsidiary, all effects of the intercompany indebtedness must be eliminated. A company cannot report an investment in its own bonds to itself. Thus when the consolidated entity is viewed as a single company, all amounts associated with intercompany indebtedness must be eliminated, including investment in bonds, the bonds payable any unamortized discount or premium, the interest income or expenses on the bonds and any accrued interest receivable or payable.

Retirement of bonds: when a constrictive retirement occurs, the consolidated income statement for the period reports a gain or loss on retirement, but not reported in consolidated balance sheet. If the company purchases the bond of an affiliate from an unrelated party at a price equal to the liability reported, the elimination entries required to be prepared in consolidated financial statement.

The consolidation entries to remove the effects of intercompany bond ownership in preparing consolidated financial statements in the next year 20X6.

Answer 6

Chapter 8, Problem 8.8E

To determine

Intercompany sale of bonds: when a company sells bonds to its subsidiary, all effects of the intercompany indebtedness must be eliminated. A company cannot report an investment in its own bonds to itself. Thus when the consolidated entity is viewed as a single company, all amounts associated with intercompany indebtedness must be eliminated, including investment in bonds, the bonds payable any unamortized discount or premium, the interest income or expenses on the bonds and any accrued interest receivable or payable.

Retirement of bonds: when a constrictive retirement occurs, the consolidated income statement for the period reports a gain or loss on retirement, but not reported in consolidated balance sheet. If the company purchases the bond of an affiliate from an unrelated party at a price equal to the liability reported, the elimination entries required to be prepared in consolidated financial statement.

The consolidation entries to remove the effects of intercompany bond ownership in preparing consolidated financial statements.

Answer 7

Chapter 8, Problem 8.8E

To determine

Intercompany sale of bonds: when a company sells bonds to its subsidiary, all effects of the intercompany indebtedness must be eliminated. A company cannot report an investment in its own bonds to itself. Thus when the consolidated entity is viewed as a single company, all amounts associated with intercompany indebtedness must be eliminated, including investment in bonds, the bonds payable any unamortized discount or premium, the interest income or expenses on the bonds and any accrued interest receivable or payable.

Retirement of bonds: when a constrictive retirement occurs, the consolidated income statement for the period reports a gain or loss on retirement, but not reported in consolidated balance sheet. If the company purchases the bond of an affiliate from an unrelated party at a price equal to the liability reported, the elimination entries required to be prepared in consolidated financial statement.

The consolidation entries to remove the effects of intercompany bond ownership in preparing consolidated financial statements.

Answer 8

b

To determine

Intercompany sale of bonds: when a company sells bonds to its subsidiary, all effects of the intercompany indebtedness must be eliminated. A company cannot report an investment in its own bonds to itself. Thus when the consolidated entity is viewed as a single company, all amounts associated with intercompany indebtedness must be eliminated, including investment in bonds, the bonds payable any unamortized discount or premium, the interest income or expenses on the bonds and any accrued interest receivable or payable.

Retirement of bonds: when a constrictive retirement occurs, the consolidated income statement for the period reports a gain or loss on retirement, but not reported in consolidated balance sheet. If the company purchases the bond of an affiliate from an unrelated party at a price equal to the liability reported, the elimination entries required to be prepared in consolidated financial statement.

The consolidation entries to remove the effects of intercompany bond ownership in preparing consolidated financial statements in the next year 20X6.

Answer 9

b

To determine

Intercompany sale of bonds: when a company sells bonds to its subsidiary, all effects of the intercompany indebtedness must be eliminated. A company cannot report an investment in its own bonds to itself. Thus when the consolidated entity is viewed as a single company, all amounts associated with intercompany indebtedness must be eliminated, including investment in bonds, the bonds payable any unamortized discount or premium, the interest income or expenses on the bonds and any accrued interest receivable or payable.

Retirement of bonds: when a constrictive retirement occurs, the consolidated income statement for the period reports a gain or loss on retirement, but not reported in consolidated balance sheet. If the company purchases the bond of an affiliate from an unrelated party at a price equal to the liability reported, the elimination entries required to be prepared in consolidated financial statement.

The consolidation entries to remove the effects of intercompany bond ownership in preparing consolidated financial statements in the next year 20X6.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 8 - Prob. 8.1Q Ch. 8 - What is meant by a constructive bond retirement in...Ch. 8 - Prob. 8.3Q Ch. 8 - Prob. 8.4Q Ch. 8 - When a parent company sells land to a subsidiary...Ch. 8 - Prob. 8.7Q Ch. 8 - Prob. 8.8Q Ch. 8 - Prob. 8.9Q Ch. 8 - Prob. 8.10Q Ch. 8 - Prob. 8.11Q

Solution Summary: The author explains that when a company sells bonds to its subsidiary, all effects of intercompany indebtedness must be eliminated.

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