Assume that a Parent company owns 100 percent of its Subsidiary. On January 1, 2019, the...

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Assume that a Parent company owns 100 percent of its Subsidiary. On January 1, 2019, the Parent company had $600,000 of bonds payable (par) outstanding with a carrying value of $630,000. The bonds were originally issued to an unaffiliated company. On that same date, the Subsidiary acquired the bonds for $594,000. During 2019, the Parent company reported $270,000 of (pre-consolidation) income from its own operations (i.e., prior to any equity method adjustments by the Parent company) and after recording interest expense. The Subsidiary reported $150,000 of (pre-consolidation) income from its own operations after recording interest income. Related to the bonds during 2019, the parent reported interest expense of $67,500 while the subsidiary reported interest income of $61,500. Determine the following amounts that will appear in the 2019 consolidated income statement: Note: If no amount will appear on the consolidated income statement, enter zero. If item c. is a loss, use a negative sign with your answer. a. Interest income from bond investment $ b. Interest expense on bond payable $ c. Gain (loss) on constructive retirement of bond payable $ d. Consolidated net income Amount Assume that a Parent company owns 100 percent of its Subsidiary. On January 1, 2019, the Parent company had $600,000 of bonds payable (par) outstanding with a carrying value of $630,000. The bonds were originally issued to an unaffiliated company. On that same date, the Subsidiary acquired the bonds for $594,000. During 2019, the Parent company reported $270,000 of (pre-consolidation) income from its own operations (i.e., prior to any equity method adjustments by the Parent company) and after recording interest expense. The Subsidiary reported $150,000 of (pre-consolidation) income from its own operations after recording interest income. Related to the bonds during 2019, the parent reported interest expense of $67,500 while the subsidiary reported interest income of $61,500. Determine the following amounts that will appear in the 2019 consolidated income statement: Note: If no amount will appear on the consolidated income statement, enter zero. If item c. is a loss, use a negative sign with your answer. a. Interest income from bond investment $ b. Interest expense on bond payable $ c. Gain (loss) on constructive retirement of bond payable $ d. Consolidated net income Amount

Answer rating: 100% (QA)

a Interest income from bond investment The Subsidiary acquired the bonds for 594000 and the Parent r... View the full answer