Since its 100% acquisition of Dancer Corporation stock on December 31, 2012, Jones Corporation has maintained its

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Since its 100% acquisition of Dancer Corporation stock on December 31, 2012, Jones Corporation has maintained its investment under the equity method. However, due to Dancer's earning potential, the price included a $40,000 payment for goodwill. At the time of the purchase, the fair value of Dancer's assets equaled their book value.

On January 2, 2014, Dancer Corporation issued 10-year, 7% bonds at a face value of $50,000. The bonds pay interest each December 31. On January 2, 2016, Jones Corporation purchased all of Dancer Corporation's outstanding bonds for $48,000. The discount is amortized on a straight-line basis. They have been included in Jones's long-term investment in bonds account. Below are the trial balances of both companies on December 31, 2016.

Since its 100% acquisition of Dancer Corporation stock on December

Required
1. Prepare the worksheet entries needed to eliminate the intercompany debt on December 31, 2016.
2. Prepare a consolidated income statement for the year ended December 31, 2016.

Consolidated Income Statement
When talking about the group financial statements the consolidated financial statements include Consolidated Income Statement that a parent must prepare among other sets of consolidated financial statements. Consolidated Income statement that is...
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...
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Related Book For  answer-question

Advanced Accounting

ISBN: 978-1305084858

12th edition

Authors: Paul M. Fischer, William J. Tayler, Rita H. Cheng

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