What was the original purchase price of the bonds

Assignment Help Financial Accounting

Reference no: EM131286227

Nettle Corporation sold $100,000 par value, 10-year first mortgage bonds to Timberline Corporation on January 1, 20X5. The bonds, which bear a nominal interest rate of 12 percent, pay interest semiannually on January 1 and July 1. The current market interest rate is 11 percent. Timberline Corporation owns 65 percent of the voting stock of Nettle Corporation, and consolidated statements are prepared on December 31, 20X7.

Required:

a. What was the original purchase price of the bonds to Timberline Corporation? (Round your answer to 2 decimal places.)

b. What is the balance in Timberline’s bond investment account on December 31, 20X7? (Do not round your intermediate calculations. Round your final answer to nearest whole dollar.)

c. Prepare the worksheet consolidation entry or entries needed to remove the effects of the intercompany ownership of bonds in preparing consolidated financial statements for 20X7. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations. Round your final answer to nearest whole dollar.)

Reference no: EM131286227

Questions Cloud

Financial statement disclosure for unearned revenue : Bravo was paid $12,000 in advance for services to be performed. By the end of the year, only one-eighth of the services had been performed. What will be the financial statement disclosure for Bravo's Unearned Revenue at the end of the year?

Entrepreneurs perspective on decision-making : After listening to this entrepreneur’s perspective on decision-making, how would you categorize her decision making style? Include at least two examples that support your choice.

Fraud detection and deterrence : Write a case describing a fraud of a type consistent with one of the many types of fraud we discussed during the class (such as larceny, asset misappropriation, cash skimming, among others). The case discussion in your paper should include at a minim..

What amount of interest expense should be reported : Wood Corporation owns 1 percent of Carter Company’s voting shares. On January 1, 20X3, Carter sold bonds with a par value of $660,000 at 98. Wood purchased $440,000 par value of the bonds; the remainder was sold to nonaffiliates. What amount of inter..

What was the original purchase price of the bonds : Nettle Corporation sold $100,000 par value, 10-year first mortgage bonds to Timberline Corporation on January 1, 20X5. The bonds, which bear a nominal interest rate of 12 percent, pay interest semiannually on January 1 and July 1. What was the origin..

Prepare the worksheet consolidation entry : Able Company issued $1,080,000 of 9 percent first mortgage bonds on January 1, 20X1, at 104. The bonds mature in 20 years and pay interest semiannually on January 1 and July 1. Prepare the worksheet consolidation entry or entries needed to remove the..

What would be the fair value of the reporting unit : The fair value of net identifiable assets of a reporting unit of Y Company is $270,000. The carrying value of the reporting unit's net assets on Y Company's books is $320,000, including $50,000 goodwill. If the reported goodwill impairment for the un..

Uses the doubledeclining- depreciation method : On 2010 July 1, Frick Company purchased equipment for $400,000, and installation and testing costs totaled $40,000. The equipment has an estimated useful life of 10 years and an estimated salvage value of $40,000. If Frick uses the doubledeclining- d..

Determine the maximum profit margin : An electronics manufacturing company is planning to introduce a new product in the market. The best competitor sells a similar product at $420/unit. using the information given, determine the maximum profit margin that the company can have so as to r..

User Account

All Pages