ACCT: Constructive Retirement at Beginning of Year (Effective Interest Method). ACCT: Constructive Retirement at Beginning of Year (Effective Interest Method).
| Able Company issued $870,000 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. Prime Corporation purchased $580,000 of Able’s bonds from the original purchaser on January 1, 20X5, for $576,800. Prime owns 60 percent of Able’s voting common stock. Use effective interest method. |
| a.Prepare the worksheet consolidation entry or entries needed to remove the effects of the intercorporate bond ownership in preparing consolidated financial statements for 20X5. (Do not round your intermediate calculations. Round your final answers to nearest whole dollar.)
b. Prepare the worksheet consolidation entry or entries needed to remove the effects of the intercorporate bond ownership in preparing consolidated financial statements for 20X6. (Do not round your intermediate calculations. Round your final answers to nearest whole dollar.)
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ACCT: Constructive Retirement at Beginning of Year (Effective Interest Method)
ACCT: Constructive Retirement at Beginning of Year (Effective Interest Method)
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