Suspect Company Issued $1,170,000 of 8 percent first mortgage bonds on January 1, 20X1, at 104....

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Suspect Company Issued $1,170,000 of 8 percent first mortgage bonds on January 1, 20X1, at 104. The bonds mature in 20 years and pay interest semiannually on January 1 and July 1. Prime Corporation purchased $780,000 of Suspect's bonds from the original purchaser on December 31, 20X5, for $774,000. Prime owns 70 percent of Suspect's voting common stock. Required: a. Prepare the worksheet consolidation entry or entries needed to remove the effects of the Intercorporate bond ownership in preparing consolidated financial statements for 20X5. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your Intermediate calculations. Round your final answers to nearest whole dollar.) Answer is complete but not entirely correct. No Accounts Debit Credit Event 1 A Bonds payable 780,000✔ Premium on bonds payable 11,700 X 774,000 Investment in Suspect Company bonds Gain on bond retirement 31,200 B 2 Interest payable 31,200 Interest receivable 31,200 b. Prepare the worksheet consolidation entry or entries needed to remove the effects of the Intercorporate bond ownership in preparing consolidated financial statements for 20X6. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations. Round your final answers to nearest whole dollar.) Answer is not complete. No Event Accounts Debit Credit 3333 33 Consolidation Worksheet Entries < A B Record the entry to eliminate the effects of the intercompany ownership in bonds for 20X6. Note: Enter debits before credits. Consolidation Worksheet Entries A B Record the entry to eliminate the intercompany interest receivables/payables for 20X6. Note: Enter debits before credits. Event Accounts Debit Credit 2 Record entry Clear entry view consolidation entries Suspect Company Issued $1,170,000 of 8 percent first mortgage bonds on January 1, 20X1, at 104. The bonds mature in 20 years and pay interest semiannually on January 1 and July 1. Prime Corporation purchased $780,000 of Suspect's bonds from the original purchaser on December 31, 20X5, for $774,000. Prime owns 70 percent of Suspect's voting common stock. Required: a. Prepare the worksheet consolidation entry or entries needed to remove the effects of the Intercorporate bond ownership in preparing consolidated financial statements for 20X5. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your Intermediate calculations. Round your final answers to nearest whole dollar.) Answer is complete but not entirely correct. No Accounts Debit Credit Event 1 A Bonds payable 780,000✔ Premium on bonds payable 11,700 X 774,000 Investment in Suspect Company bonds Gain on bond retirement 31,200 B 2 Interest payable 31,200 Interest receivable 31,200 b. Prepare the worksheet consolidation entry or entries needed to remove the effects of the Intercorporate bond ownership in preparing consolidated financial statements for 20X6. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations. Round your final answers to nearest whole dollar.) Answer is not complete. No Event Accounts Debit Credit 3333 33 Consolidation Worksheet Entries < A B Record the entry to eliminate the effects of the intercompany ownership in bonds for 20X6. Note: Enter debits before credits. Consolidation Worksheet Entries A B Record the entry to eliminate the intercompany interest receivables/payables for 20X6. Note: Enter debits before credits. Event Accounts Debit Credit 2 Record entry Clear entry view consolidation entries

Answer rating: 100% (QA)

Answer Solution In the books of consolidation prime corporation I Year 2015 the proceeds form issue ... View the full answer