Assume the same facts as in E8 12 but prepare entries using straight line amortization of bond discount or premium In E8 12 Bundle Company issued $500,000 par value, 10 year bonds at 104 on January 1, 20X3, which Mega Corporation purchased The coupon rate on the bonds is 11 percent Interest payment...

a No gain or loss will be reported by Bundle b A gain of 13000 will be reported Book value of liability reported by Bundle Par value of bonds outstand ...

Assume the same facts as in E8-12 but prepare entries using straight-line amortization of bond discount or

Question:

Assume the same facts as in E8-12 but prepare entries using straight-line amortization of bond discount or premium.
In E8-12
Bundle Company issued $500,000 10-year bonds at 104 on January 1, 20X3, which Mega purchased. The rate on the bonds is 11 percent. Interest payments are made semiannually on July 1 and January 1. On July 1, 20X6, Parent Company purchased $200,000 of the bonds from Mega for $192,200. Parent owns 70 percent of Bundle's voting shares.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...