The balance sheets of Pin and Sid Corporations, an 80 percent-owned subsidiary of Pin, at December 31, 2011, are as follows (in thousands):

The book value of Pin's bonds reflects a $100,000 unamortized discount. The book value of Sid's bonds reflects a $20,000 unamortized premium.REQUIRED1. Assume that Sid purchases $2,000,000 par of Pin's bonds for $1,900,000 on January 2, 2012, and that semiannual interest is paid on July 1 and January 1. Determine the amounts at which the following items should appear in the consolidated financial statements of Pin and Sid at and for the year ended December 31, 2012.a. Gain or loss on bond retirementb. Interest payablec. Bonds payable at par valued. Investment in Pin bonds2. Disregard 1 above and assume that Pin purchases $1,000,000 par of Sid's bonds for $1,030,000 on January 2, 2012, and that semiannual interest on the bonds is paid on July 1 and January 1. Determine the amounts at which the following items will appear in the consolidated financial statements of Pin and Sid for the year ended December 31, 2012.a. Gain or loss on bond retirementb. Interest expense (assume straight-line amortization)c. Interest receivabled. Bonds payable at bookvalue

Transcribed Image Text:

Pin Sid Assets Cash $ 2.440 $2,500 Accounts receivable-net Other current assets 3,000 300 8,000 1.200 5.500 Plant assets-net 15,000 Investment in Sid 6,560 $9,500 $35,000 Total assets Liabilities and Stockholders' Equity Accounts payable Interest payable 10% bonds payable (due January 1, 2017) Capital stock Retained earnings Total liabilities and stockholders' equity $ 750 $ 230 250 50 1,020 4.900 25.000 7,000 4.100 $35,000 1,200 $9,500