Cairns owns 75 percent of the voting stock of Hamilton, Inc The parent 's interest was acquired several years ago on the date that the subsidiary was formed Consequently, no goodwill or other allocation was recorded in connection with the acquisition Cairns uses the equity method in its internal re...

a Carrying Amount of Bonds Payable January 1 2016 Carrying amount January 1 2014 1050000 Amortization20142015 5000 per year 50000 premium 10 years for two years 10000 Carrying amount of bonds payable ...

Cairns owns 75 percent of the voting stock of Hamilton, Inc. The parent's interest was acquired several

Question:

Cairns owns 75 percent of the voting stock of Hamilton, Inc. The parent's interest was acquired several years ago on the date that the subsidiary was formed. Consequently, no or other allocation was recorded in connection with the acquisition. Cairns uses the equity method in its internal records to account for its investment in Hamilton.
On January 1, 2014, Hamilton sold $1,000,000 in 10-year bonds to the public at 105. The bonds had a cash interest rate of 9 percent payable every December 31. Cairns acquired 40 percent of these bonds at 96 percent of on January 1, 2016. Both companies utilize the straight-line method of amortization. Prepare the consolidation worksheet entries to recognize the effects of the intra-entity bonds at each of the following dates.
a. December 31, 2016
b. December 31, 2017
c. December 31, 2018
Goodwill
Goodwill is an important concept and terminology in accounting which means good reputation. The word goodwill is used at various places in accounting but it is recognized only at the time of a business combination. There are generally two types of... Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...