Question: 1 B 1 1 x fx Problem #2. (22 pts) Prussia Inc. had $600,000 par of 8% bonds payabl C D E F G H

1 B 1 1 x fx Problem #2. (22 pts) Prussia Inc. had $600,000 par of 8% bonds payabl C D E F G H Problem #2. (22 pts) Prussia Inc, had $600,000 par of 8% bonds payable outstanding on January 1, 2013, due January 1, 2017 with an unamortized discount of $12,000. Stad is a 90%-owned subsidiary of Prussia. Jon January 2, 2013, Stad Corporation purchased $150,000 par value of Prussia's outstanding bonds for $142,000. The bonds pay interest semiannually on January 1 and July 1. Straight-line amortization is used. Stad's net income for 2013 is $60,000 and for 2014 is $100.000 10 6 7 Required: 8 1.(2 pts) Compute the constructive gain or loss that will appear in the consolidated income statement for 2013. 9 2. (10 pts) To eliminate the intercompany bondholding in 2013: a. Prepare consolidation journal entries at December 31, 2013 11 b. Prepare consolidation workpaper for 2013 including the accounts adjusted on the consolidated 12 Income statement and consolidated balance sheet 13 3.(10 pts) To eliminate the intercompany bondholding in 2014: 14 2. Prepare consolidation journal entries at December 31, 2014 b. Prepare consolidation workpaper for 2014 including the accounts adjusted on the consolidated 16 Income statement and consolidated balance sheet 15 15 19 20 21 22 24 25 2 27 20 29 30 31 37 19 40 Problem 1 Problem 2 Se destacard INTER or choose Paste + 1 B 1 1 x fx Problem #2. (22 pts) Prussia Inc. had $600,000 par of 8% bonds payabl C D E F G H Problem #2. (22 pts) Prussia Inc, had $600,000 par of 8% bonds payable outstanding on January 1, 2013, due January 1, 2017 with an unamortized discount of $12,000. Stad is a 90%-owned subsidiary of Prussia. Jon January 2, 2013, Stad Corporation purchased $150,000 par value of Prussia's outstanding bonds for $142,000. The bonds pay interest semiannually on January 1 and July 1. Straight-line amortization is used. Stad's net income for 2013 is $60,000 and for 2014 is $100.000 10 6 7 Required: 8 1.(2 pts) Compute the constructive gain or loss that will appear in the consolidated income statement for 2013. 9 2. (10 pts) To eliminate the intercompany bondholding in 2013: a. Prepare consolidation journal entries at December 31, 2013 11 b. Prepare consolidation workpaper for 2013 including the accounts adjusted on the consolidated 12 Income statement and consolidated balance sheet 13 3.(10 pts) To eliminate the intercompany bondholding in 2014: 14 2. Prepare consolidation journal entries at December 31, 2014 b. Prepare consolidation workpaper for 2014 including the accounts adjusted on the consolidated 16 Income statement and consolidated balance sheet 15 15 19 20 21 22 24 25 2 27 20 29 30 31 37 19 40 Problem 1 Problem 2 Se destacard INTER or choose Paste +

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