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Several years ago, Brant, Incorporated, sold $1,020,000 in bonds to the public. Annual cash interest of 8 percent ($81,600) was to be paid on this debt. The bonds were issued at a discount to yield 10 percent. At the beginning of 2022, Zack Corporation (a wholly owned subsidiary of Brant) purchased $170,000 of these bonds on the open market for $191,000, a price based on an effective interest rate of 6 percent. The bond liability had a carrying amount on that date of $900,000. Assume Brant uses the equity method to account internally for its investment in Zack. Required: a. & b. What consolidation entry would be required for these bonds on December 31, 2022 and December 31, 2024? Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate calculations and final answers to nearest whole number. No 1 2 Date December 31, 202 Bonds payable Answer is not complete. Accounts Loss on retirement of debt Interest income Investment in bonds Interest expense December 31, 202 Bonds payable Interest income Investment in Zack Investment in bonds Interest expense Debit 151,400 41,000 11,460 154,634 186,592 X 186,592 X 186,592 X 186,592 x Credit 188,860 15,000

Several years ago, Brant, Incorporated, sold $1,020,000 in bonds to the public. Annual cash interest of 8 percent ($81,600) was to be paid on this debt. The bonds were issued at a discount to yield 10 percent. At the beginning of 2022, Zack Corporation (a wholly owned subsidiary of Brant) purchased $170,000 of these bonds on the open market for $191,000, a price based on an effective interest rate of 6 percent. The bond liability had a carrying amount on that date of $900,000. Assume Brant uses the equity method to account internally for its investment in Zack. Required: a. & b. What consolidation entry would be required for these bonds on December 31, 2022 and December 31, 2024? Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate calculations and final answers to nearest whole number. No 1 2 Date December 31, 202 Bonds payable Answer is not complete. Accounts Loss on retirement of debt Interest income Investment in bonds Interest expense December 31, 202 Bonds payable Interest income Investment in Zack Investment in bonds Interest expense Debit 151,400 41,000 11,460 154,634 186,592 X 186,592 X 186,592 X 186,592 x Credit 188,860 15,000

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
Problem 3C
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Several years ago, Brant, Incorporated, sold $1,020,000 in bonds to the public. Annual cash interest of 8 percent ($81,600) was to be paid on this debt. The bonds were issued at a discount to yield 10 percent. At the beginning of 2022, Zack Corporation (a wholly owned subsidiary of Brant) purchased $170,000 of these bonds on the open market for $191,000, a price based on an effective interest rate of 6 percent. The bond liability had a carrying amount on that date of $900,000. Assume Brant uses the equity method to account internally for its investment in Zack. Required: a. & b. What consolidation entry would be required for these bonds on December 31, 2022 and December 31, 2024? Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate calculations and final answers to nearest whole number. No 1 2 Date December 31, 202 Bonds payable Loss on retirement of debt Interest income Answer is not complete. Accounts Investment in bonds Interest expense December 31, 202 Bonds payable Interest income Investment in Zack Investment in bonds Interest expense Debit 151,400 41,000 11,460 154,634 186,592 186,592 186,592 186,592 Credit 188,860 15,000
Transcribed Image Text:Several years ago, Brant, Incorporated, sold $1,020,000 in bonds to the public. Annual cash interest of 8 percent ($81,600) was to be paid on this debt. The bonds were issued at a discount to yield 10 percent. At the beginning of 2022, Zack Corporation (a wholly owned subsidiary of Brant) purchased $170,000 of these bonds on the open market for $191,000, a price based on an effective interest rate of 6 percent. The bond liability had a carrying amount on that date of $900,000. Assume Brant uses the equity method to account internally for its investment in Zack. Required: a. & b. What consolidation entry would be required for these bonds on December 31, 2022 and December 31, 2024? Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate calculations and final answers to nearest whole number. No 1 2 Date December 31, 202 Bonds payable Loss on retirement of debt Interest income Answer is not complete. Accounts Investment in bonds Interest expense December 31, 202 Bonds payable Interest income Investment in Zack Investment in bonds Interest expense Debit 151,400 41,000 11,460 154,634 186,592 186,592 186,592 186,592 Credit 188,860 15,000
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