a
Introduction:
Retirement of bonds: When a constrictive retirement takes place, the consolidated income statement for the year shows the profit or loss on retirement, but not reported in the consolidated
The entries in the books of P related to investment in S for the year 20X4.
b
Introduction:
Retirement of bonds: When a constrictive retirement takes place, the consolidated income statement for the year shows the profit or loss on retirement, but not reported in the consolidated balance sheet, if the company purchases the bond of a related company are acquired from an unrelated party at a price equal to the value reported, the elimination entries required to be prepared in the consolidated financial statement.
The entries in books of P on investment in to S company bonds
c
Introduction:
Retirement of bonds: When a constrictive retirement takes place, the consolidated income statement for the year shows the profit or loss on retirement, but not reported in the consolidated balance sheet, if the company purchases the bond of a related company are acquired from an unrelated party at a price equal to the value reported, the elimination entries required to be prepared in the consolidated financial statement.
The entries in books of S related to its bonds payable
d
Introduction:
Retirement of bonds: When a constrictive retirement takes place, the consolidated income statement for the year shows the profit or loss on retirement, but not reported in the consolidated balance sheet, if the company purchases the bond of a related company are acquired from an unrelated party at a price equal to the value reported, the elimination entries required to be prepared in the consolidated financial statement.
The entries elimination entries to complete consolidation worksheet for 20X4.
e
Introduction:
Retirement of bonds: When a constrictive retirement takes place, the consolidated income statement for the year shows the profit or loss on retirement, but not reported in the consolidated balance sheet, if the company purchases the bond of a related company are acquired from an unrelated party at a price equal to the value reported, the elimination entries required to be prepared in the consolidated financial statement.
The preparation of consolidation worksheet for 20X4
![Check Mark](/static/check-mark.png)
Want to see the full answer?
Check out a sample textbook solution![Blurred answer](/static/blurred-answer.jpg)
Chapter 8 Solutions
ADVANCED FINANCIAL ACCOUNTING IA
- Provide Journal entries necessary to record Topsails investment in Charlie companys bonds from January 2 ,20X2 to February 1,20X3.Your entry to record the sale on February 1,20X3 shuld include a reclassification adjustment .Provide Supporting calculationsarrow_forwardEntries for Investments in Bonds, Interest, and Sale of Bonds Torres Investments acquired $219,200 of Murphy Corp., 6% bonds at their face amount on October 1, Year 1. The bonds pay interest on October 1 and April 1. On April 1, Year 2, Torres sold $115,200 of Murphy Corp. bonds at 103. Journalize the entries to record the following: Do not round interim calculations. Round final answers to nearest dollar. For a compound transaction, if an amount box does not require an entry, leave it blank.arrow_forwardEntries for Investments in Bonds, Interest, and Sale of Bonds Torres Investments acquired $222,800 of Murphy Corp., 4% bonds at their face amount on October 1, Year 1. The bonds pay interest on October 1 and April 1. On April 1, Year 2, Torres sold $87,600 of Murphy Corp. bonds at 102. Journalize the entries to record the following: Do not round interim calculations. Round final answers to nearest dollar. For a compound transaction, if an amount box does not require an entry, leave it blank. a. The initial acquisition of the Murphy Corp. bonds on October 1, Year 1. Year 1, Oct. 1 fill in the blank f0a494fa0fb5f8c_2 fill in the blank f0a494fa0fb5f8c_4 b. The adjusting entry for three months of accrued interest earned on the Murphy Corp. bonds on December 31, Year 1. Year 1, Dec. 31 fill in the blank bdcee6fd5f8a063_2 fill in the blank bdcee6fd5f8a063_4 c. The receipt of semiannual interest on April 1, Year 2. Year 2,…arrow_forward
- Show Attermpt Current Attempt in Progress Fessenden Corporation has accumulated a significant amount of debt as a result of debt-financed acquisitions of other companies. It is currently considering acquiring one of its competitors, Sonar Corporation. Fessenden's existing debt covenants stipulate that it cannot go beyond a debt to equity ratio of 1.25:1 and a net debt as a percentage of capitalization ratio of 0.90:1. The acquisition of Sonar will cost $72 million. Fessenden's current level of equity is $410 million and its current level of interest-bearing debt is $562 million. Fessenden has a cash balance of $70 million. It will finance the acquisition with a 10-year bond of $72 million that carries a 5% interest rate sold at par. Your answer is partially correct. Determine Fessenden's debt to equity ratio and net debt as a percentage of capitalization ratio prior to the proposed acquisition. (Round answers to 2 decimal places, e.g. 1.25.) 1.37 :1 Debt to Equity 0.54 :1 Net Debt as a…arrow_forwardView Policies Current Attempt in Progress If bonds with a face value of $124000 are converted into common stock when the carrying value of the bonds is $118000, the entry to record the conversion will include a debit to O Bonds Payable equal to the market price of the bonds on the date of conversion. O Bonds Payable for $124000. O Discount on Bonds Payable for $6000. O Bonds Payable for $118000. eTextbook and Media Save for Later Attempts: 0 of 2 used Submit Answer 4 5 6 7 8 9 e C b narrow_forwardntries for bond (held-to-maturity) investments Bula Investments acquired $240,000 of Effenstein Corp., 8% bonds at their face amount on October 1, 20Y1. The bonds pay interest on October 1 and April 1. On April 1, 20Y2, Bula sold $90,000 of Effenstein Corp. bonds at 102. Journalize the entries to record the following selected transactions: Do not round interim calculations. Round final answers to nearest dollar. If an amount box does not require an entry, leave it blank.arrow_forward
- Entries for bond (held-to-maturity) investments Bula Investments acquired $264,000 of Effenstein Corp., 9% bonds at their face amount on October 1, 20Y1. The bonds pay interest on October 1 and April 1. On April 1, 20Y2, Bula sold $118,000 of Effenstein Corp. bonds at 104. Journalize the entries to record the following selected transactions: a. The initial acquisition of the Effenstein Corp. bonds on October 1, 20Y1. b. The adjusting entry for 3 months of accrued interest earned on the Effenstein Corp. bonds on December 31, 20Y1. c. The receipt of semiannual interest on April 1, 20Y2. d. The sale of $118,000 of Effenstein Corp. bonds on April 1, 20Y2, at 104. e. The receipt of the face value of the remaining bonds at their maturity on October 1, 20Y8.arrow_forwardEntries for bond (held-to-maturity) investments Demopoulos Company acquired $203,400 of Marimar Co., 7% bonds on May 1 at their face amount. Interest is paid semiannually on May 1 and November 1. On November 1, Demopoulos Company sold $44,400 of the bonds for 99. Journalize the entries to record the following: If an amount box does not require an entry, leave it blank. a. The initial acquisition of the bonds on May 1. May 1 b. The s Nov. 1 Cash Nov. 1 Interest Receivable Interest Revenue Investments-Marimar Co. Bonds c. The sNotes Receivable lovember 1. d. The accrual of $1,855 interest on December 31.arrow_forwardEntries for bond (held-to-maturity) investments Bula Investments acquired $240,000 of Effenstein Corp., 8% bonds at their face amount on October 1, 20Y1. The bonds pay interest on October 1 and April 1. On April 1, 20Y2, Bula sold $90,000 of Effenstein Corp. bonds at 102. Journalize the entries to record the following selected transactions: Do not round interim calculations. Round final answers to nearest dollar. If an amount box does not require an entry, leave it blank. Question Content Area a. The initial acquisition of the Effenstein Corp. bonds on October 1, 20Y1. 20Y1, Oct. 1 - Select - - Select - - Select - - Select - Question Content Area b. The adjusting entry for 3 months of accrued interest earned on the Effenstein Corp. bonds on December 31, 20Y1. 20Y1, Dec. 31 - Select - - Select - - Select - - Select - Question Content Area c. The receipt of semiannual interest on April 1, 20Y2. 20Y2, Apr. 1 - Select - - Select - - Select - - Select - - Select - - Select…arrow_forward
- Entries for bond (held-to-maturity) investments Demopoulos Company acquired $187,200 of Marimar Co., 5% bonds on May 1 at their face amount. Interest is paid semiannually on May 1 and November 1. On November 1, Demopoulos Company sold $44,400 of the bonds for 96. Journalize the entries to record the following: If an amount box does not require an entry, leave it blank. a. The initial acquisition of the bonds on May 1. May 1 - Select - - Select - - Select - - Select - b. The semiannual interest received on November 1. Nov. 1 - Select - - Select - - Select - - Select - c. The sale of the bonds on November 1. Nov. 1 - Select - - Select - - Select - - Select - - Select - - Select - d. The accrual of $1,190 interest on December 31. Dec. 31 - Select - - Select - - Select - - Select -arrow_forwardIntermediate accounting 1, Investments 4. On January 1, 20x1, ABC purchased bonds with face amount of P5,000,000. The entity paid P4,700,000 plus transaction cost of P42,130 for the bond investment. The business model of the entity in managing the financial asset is to collect contractual cash flows that are solely payment of principal and interest and also to sell the bonds the open market. The bonds mature on December 31, 20x3 and pays 6% interest annually on December 31 each year with 8% effective interest rate (after incorporating the transaction cost on initial recognition). The bonds are quoted at 106 and 108 on December 31, 20x1 and December 31, 20x2. The bonds are sold at 103 on July 1, 20x3, excluding accrued interest. Use 4-decimal present value factor. The initial amount of the investment in bonds is (sample answer: 2,350,450)arrow_forwardComplete the following partial worksheet for Pat Inc. and Slinger Company for the year acquisition of intercompany bonds 2013. Pat In. and Subsidiary Slinger Company Partial Consolidated Worksheet For Year Ended December 31, 2013 Trial Balance Eliminations and Adjustments Pat Slinger Dr Cr. Interest receivable 8,000 Investment in Slinger bonds 100,898 Interest payable (8,000) Bonds payable (100,000) Premium on bonds payable (448) Interest income* Interest expense* *To be entered Eliminations and Adjustments: (B1) Eliminate the intercompany bonds and the applicable interest and revenue and expense. Record the gain or loss on retirement. (B2) Eliminate the intercompany interest payable…arrow_forward
- Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337690881/9781337690881_smallCoverImage.gif)