Cardinal Company is an 80%- owned subsidiary of Dove Corporation. Cardinal Company issued $100,000 of 8%, 10-year bonds for $96,000 on January 1, 2011. Annual interest is paid on January 1. Dove Corporation purchased the bonds on January 1, 2015, for $101,500. Both companies use the straight-line method to amortize the premium/discount on the bonds. 1. Prepare the eliminations and adjustments that would be made on the December 31, 2015, consolidated worksheet as a result of this purchase. 2. Prepare the eliminations and adjustments that would be made on the December 31, 2016, consolidated worksheet.
Cardinal Company is an 80%- owned subsidiary of Dove Corporation. Cardinal Company issued $100,000 of 8%, 10-year bonds for $96,000 on January 1, 2011. Annual interest is paid on January 1. Dove Corporation purchased the bonds on January 1, 2015, for $101,500. Both companies use the straight-line method to amortize the premium/discount on the bonds. 1. Prepare the eliminations and adjustments that would be made on the December 31, 2015, consolidated worksheet as a result of this purchase. 2. Prepare the eliminations and adjustments that would be made on the December 31, 2016, consolidated worksheet.
Financial Accounting
14th Edition
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Carl Warren, Jim Reeve, Jonathan Duchac
Chapter15: Investments And Fair Value Accounting
Section: Chapter Questions
Problem 1E: Parilo Company acquired 170,000 of Makofske Co., 5% bonds on May 1, 2016, at their face amount....
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Cardinal Company is an 80%- owned subsidiary of Dove Corporation. Cardinal Company issued $100,000 of 8%, 10-year bonds for $96,000 on January 1, 2011. Annual interest is paid on January 1. Dove Corporation purchased the bonds on January 1, 2015, for $101,500. Both companies use the straight-line method to amortize the premium/discount on the bonds.
1. Prepare the eliminations and adjustments that would be made on the December 31, 2015, consolidated worksheet as a result of this purchase.
2. Prepare the eliminations and adjustments that would be made on the December 31, 2016, consolidated worksheet.
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