Question: Linco Industries is a 90 owned subsidiary of Sharp Incorporated On

Linco Industries is a 90%-owned subsidiary of Sharp Incorporated. On January 1, 2015, Linco issued $100,000 of 10-year, 6% bonds for $86,580, to yield 8% interest. Interest is paid annually on January 1. The effective interest method is used to amortize the premium. Sharp purchased the bonds for $84,901 on January 2, 2018, when the market rate of interest was 9%. On the purchase date, the remaining discount on the bonds was $10,413. Linco’s 2018 net income was $500,000.
1. Prepare the eliminations and adjustments required for this purchase on the December 31, 2018, consolidated worksheet. Amortization schedules will be needed to January 1, 2019.
2. Prepare the 2018 income distribution schedule for the NCI.

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  • CreatedApril 13, 2015
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