What was the original purchase price of the bonds

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Question: 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?

b. What is the balance in Timberline's bond investment account on December 31, 20X7?

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.

Record the entry to eliminate the effects fo the intercompany ownership inthe bonds

Record the entry to eliminate the effects fo the intercompany interest receivables/payables

Reference no: EM131813962

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