What consolidation entry could be needed for these bonds

Assignment Help Financial Accounting

Reference no: EM133305

Question :

Several years ago Abrams, Inc., sold $1,120,000 in bonds to the public. Yearly cash interest of 9 % ($100,800) was to be paid on this debt. The bonds were issued at a discount to yield 12%. At the starting of 2012, Bierman Corporation (a wholly owned subsidiary of Abrams) purchased $140,000 of these bonds on the open market for $161,000, a price based on an effectual interest rate of 7 percent. The bond liability had a book value on that date of $980,000. Consider Abrams uses the equity technique to account internally for its investment in Bierman.

a. What consolidation entry could be needed for these bonds on December 31, 2012?

Event General Journal Debit Credit

Entry B

b. What consolidation entry would be required for these bonds on December 31, 2014? (Do not round intermediate calculations. Round your answers to the nearest dollar amount.)

Event General Journal Debit Credit

Entry *B

Reference no: EM133305

Questions Cloud

Evaluate the operating costs : All operating costs are variable as a percentage of total sales.

What should be the required initial investment : What should be the required initial investment at the starting of the first year if the fund earns 11%?

Recognize the impact of this stock transaction : What journal entry could Albuquerque make to recognize the impact of this stock transaction?

Compute janice morgans 2011 federal income tax payable : Compute Janice Morgan's 2011 Federal income tax payable. If you use tax forms for your computations, you will need Forms 1040 and 4562 and Schedules A, B, C, and SE. Suggested software: H&R BLOCK At Home.

What consolidation entry could be needed for these bonds : What consolidation entry could be needed for these bonds on December 31, 2012?

Model view controller pattern : PHP Frameworks, class patterns and object patterns, Object Oriented Design Principles, Program to an ‘interface' not to an Implementation, Open Close Principle, Principle of Least Knowledge, creational design prototypes, Dependency Inversion principl..

Create a cash budget for the months of july : Create a cash budget for the months of July through September 2012. Show required schedules for the calculation of receivables and payables.

Describe why the fair value of a companys assets : Describe why the fair value of a company's assets is used in the preparation of combined financial statement

Partial income statement account balances : Prepare an amortization schedule for the Note Receivable using the subsequent columns

User Account

All Pages