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Prepare journal entry allie will record for bond interest

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On 1/1/2019, Allie Company issued bonds payable of $400,000 at 8%. It was sold at $364,000 with effective interest rate of 9%. On 1/1/2020, Choco purchased all of Allie's bond for $432,000 cash with effective interest at 7% and Allie's bonds payable has been effectively retired.

Question a) What is Allies' book value of $400,000 bonds payable on 1/1/2020?

Question b) Prepare journal entry that Choco will record on 1/1/2020 regarding purchase of Allie's bond.

Question c) Compute and specify the consolidated gain or loss on a consolidated income statement for at the end of 2020

Question d) Prepare journal entry that Allie will record for bond interest expense on 12/31/2020

Question e) Prepare journal entry that Choco will record for bond interest income on 12/31/2020

Question f) Prepare consolidation entry B on 12/31/2020

Question g) Prepare journal entry that Allie will record for bond interest expense on 12/31/2021

Question h) Prepare journal entry that Choco will record for bond interest income on 12/31/2021

Question i) Prepare consolidation entry B on 12/31/2021

Reference no: EM132493126

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