8-26 - P8-26 Intercorporate Bond Holdings and Other

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the 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

Page1 / 5

8-26 - P8-26 Intercorporate Bond Holdings and Other

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online