Reference no: EM132719240
Question - The Platt Company owns 100% of the outstanding common stock of the Scott Company. Scott issued $100,000 of face value, 9%, 10-year bonds on January 1, 2015, for $96,000. The discount is being amortized on a straight-line basis. On January 1, 2020, Platt purchased all the bonds as an investment for $95,000.
Required - Be specific in answering the following questions and include numerical explanations (and/or journal entries).
a. How will this bond issue be recorded and accounted for in 2020 on the separate books of Platt and Scott?
b. How will this bond issue be accounted for on the 2020 consolidated statements?
c. How will this bond issue be recorded and accounted for in 2021 on the separate books of Platt and Scott?
d. How will this bond issue be accounted for on the 2021 consolidated statements?
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