What is consolidated income

Assignment Help Accounting Basics

Reference no: EM132695596

Question - On January 1, 2000 Apple Company acquired all of the stock of Pear Company at book value. Apple accounts for its investment in Pear using the initial value method and Pear doesn't pay any dividends On January 1st 2015 Pear Company issued $1,000,000 face value bonds for $930,000 These 7% bonds pay interest each July 1 and January 1. Pear uses straight line amortization on these 20 year bonds. On January 1, 2020, Apple Company acquired all of the Pear bonds for $955,000.

REQUIRED -

a) Make Pear's journal entry when it sold the bonds in 2015.

b) Make the journal entry Pear makes when it makes its first interest payment on July 1, 2015.

c) Make the entry Apple makes when it acquires the bonds in 2020.

d) Make the entry Apple makes when it receives its first journal entry on July 1, 2020

e) Make the necessary worksheet entries for 2020.

f) In 2020, Apple reported unconsolidated income of $900,000 and Pear reported income of $100,000 what is consolidated income.

g) Make the necessary worksheet entries for 2021.

h) In 2021, Apple reported unconsolidated income of $800,000 and Pear reported income $125,000 what is consolidated income.

Reference no: EM132695596

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