Spott is a 75%-owned subsidiary of Penthal.On January 1,2013,Spott issued $900,000 of $1,000 face amount 8% bonds at par.The bonds have interest payments on January 1 and July 1 of each year and mature on January 1,2017.On July 2,2014,Penthal purchased all 900 bonds on the open market for $1,020 per bond.Both companies use straight-line amortization.
Required: With respect to the bonds,use General Journal format to:
1.Record the 2014 journal entries from July 1 to December 31 on Spott's books.
2.Record the 2014 journal entries from July 1 to December 31 on Penthal's books.
3.Record the elimination entries for the consolidation working papers for the year ending December 31,2014.

Question

Quizplus · Accepted Answer

The Answer of Spott is a 75%-owned subsidiary of Penthal.On January 1,2013,Spott issued $900,000 of $1,000 face amount 8% bonds at par.The bonds have interest payments on January 1 and July 1 of each year and mature on January 1,2017.On July 2,2014,Penthal purchased all 900 bonds on the open market for $1,020 per bond.Both companies use straight-line amortization.
Required: With respect to the bonds,use General Journal format to:
1.Record the 2014 journal entries from July 1 to December 31 on Spott's books.
2.Record the 2014 journal entries from July 1 to December 31 on Penthal's books.
3.Record the elimination entries for the consolidation working papers for the year ending December 31,2014.

Spott Is a 75%-Owned Subsidiary of Penthal