a
Introduction: When constructive retirement occurs the consolidated income statement reports gain or loss based on the difference between carrying value and purchase price paid by the affiliate to acquire it. And it is not reported in the consolidated
The consolidation entries needed for December 31, 20X5, consolidation worksheet.
b
Introduction: When constructive retirement occurs the consolidated income statement reports gain or loss based on the difference between carrying value and purchase price paid by the affiliate to acquire it. And it is not reported in the consolidated balance sheet either as bond payable or as an investment because the bonds are no longer outstanding.
The consolidation entries needed for December 31, 20X6
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Chapter 8 Solutions
ADVANCED FINANCIAL ACCOUNTING IA
- Identify the types of information that can readily be deter-mined from an amortization table for an installment loan. (More than one answer may be correct.)a. Interest expense on this liability for the current year. b. The present value of the future payments under chang-ing market conditions. c. The unpaid balance remaining after each payment.d. The portion of the unpaid balance that is a currentliability.arrow_forwardX Co. can deduct life insurance premiums paid providing: O the life insurance policy is required as security on a loan from a financial institution O the company paid the life insurance policy within the year O the premium paid is for insurance on the president of X Co O the premium paid is reasonable in terms of costarrow_forwardLimited payment whole life insurance is a contract written for a given number of years after which the face value is automatically paid to the insured. True, Falsearrow_forward
- Bonds that may be redeemed prior to maturity at the option of the issuer are called a. early retirement bonds b. options c. callable bonds d. debenturesarrow_forwardA serial bond repayment plan involves a(n) Group of answer choices A. series of installments to retire the debt over the life of the issue. B. early redemption of all debt. C. lump-sum payment at maturity. D. conversion of debt to common stock.arrow_forwardThe amortization of premium on bonds payable will _____________ the net income. a. increaseb. decreasec. not affectd. offsetarrow_forward
- Which of the following will be classified as a current liability? O a. Two-year noțes payable O b. Unearned rent Oc. Bonds payable Od. Mortgage loanarrow_forwardPower Solutions Ltd. issues a $15,000,000, five-year, 4.5% bond with semi-annual interest payments. Underwriting costs, paid up front, are $960,00O. The bond sells at par. Required: 1. How much cash does Power receive when the bond is issued? Power receives 2. What is the effective interest rate on the bond? (Round your answer to the nearest whole percentage.) Effective interest rate per annumarrow_forwardThe future value of annual deposited started from the end of period one up to year 7, is: Select one: a. A(F/A,i,7) b. A(F/A,i,6) C. P(F/A,i,7) d. P(F/A,i,6)arrow_forward
- Callable bonds are the bonds which are redeemed after fixed no. of years. T/F?arrow_forwardAssuming the investment is appropriately recognized as a financial asset intended to collect contractual cash flows and also to sell the bonds in open market: How much is the interest receivable to be recognized on December 31, 2020?arrow_forwardCurrent liabilities are obligations where liquidation is reasonably expected to require the use of existing current assets or the creation of other current liabilities within: A. one year. B. one year or one operating cycle, whichever is longer. C. one year or one operating cycle, whichever is shorter. D. an operating cylce.arrow_forward
- Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
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