Solution-Prepare journal entry that Choco will record

Prepare journal entry that Choco will record

Reference no: EM133076156

Question - On 1/1/2019, Allie Company issued bonds payable of $500,000 at 8%. It was sold at $464,000 with effective interest rate of 9%. On 1/1/2020, Choco purchased all of Allie's bond for $532,000 cash with effective interest at 7% and Allie's bonds payable has been effectively retired.

1) What is Allies' book value of $500,000 bonds payable on 1/1/2020?

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

3) Compute the consolidated gain or loss on a consolidated income statement for at the end of 2020.

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

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

6) Prepare consolidation entry B on 12/31/2020?

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

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

9) Prepare consolidation entry B on 12/31/2021?

Reference no: EM133076156

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Prepare journal entry that Choco will record

Reference no: EM133076156

Reference no: EM133076156

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