This preview shows pages 1–3. Sign up to view the full content.
This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
Unformatted text preview: P8-26 Intercorporate Bond Holdings and Other TransfersBuildingP------SCost125,0002512/31/x7A/D75,000BV50,000105,00012/31/x7Selling price65,000106,500Gain15,000Acc Depre is: 0 should be 75,000LandP<------S7/1/x6Cost22,000Selling price35,000Gain13,000BONDS:Sub =IssuerEntireIntercompany1/1/x5Bonds payable100,00040,000Discount 5,000Amort: 5,000/1050020012/31/x7Balance 7x5003,5007x200 = 1,40012/31/x8Balance3,0001,200Interest Expense 40,000 x 10% = 4,000 +200 = 4,200Parent=PurchaserIntercompany12/31/x7Investment in Bonds 42,800Premium 2,800Amort: 2,800/740012/31/x7Balance12/31/x8Balance42,400Interest Income 40,000 x 10% = 4,000 - 400 = 3,600Constructive retirement in x7 BP of 38,600 retired for 42,800 =loss of 4,200Interest expense 4,200 Interest income 3,600 difference 600P8-26 continuedEquity Method Entries:Investment in S22,500Income from S22,500to record net income 30,000 x 75%Cash7,500Investment in S7,500Dividends 10,000 x 75%a.Eliminating entries, December 31, 20X8:E(1)Income from Subsidiary22,500Dividends Declared7,500Investment in Skate Company Stock15,000Eliminate income from subsidiary....
View Full Document
- Spring '08