Question

Assume the same facts as in E8-14 except for the changes in the trial balances, but prepare entries using straight-line amortization of bond discount or premium.


In E8-14
Porter Company purchased 60 percent ownership of Temple Corporation on January 1, 20X1, at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 40 percent of Temple's book value. On January 1, 20X1, Porter sold $80,000 par value, 8 percent, five-year bonds directly to Temple when the market interest rate was 7 percent. The bonds pay interest annually on December 31. Porter uses the fully adjusted equity method in accounting for its ownership of Temple. On December 31, 20X2, the trial balances of the two companies are asfollows:


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  • CreatedMay 23, 2014
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