Paka Corporation owns an 80% interest in Sandra Company.Paka acquired Sandra's bonds on January 2, 2011.The following information is from the adjusted trial balances at December 31, 2011, at which time the bonds have three years to maturity.The bonds have interest payment dates of January 1 and July 1.Straight-line amortization is used by both companies.
Required:
Prepare the necessary consolidation working paper entries on December 31, 2011 with respect to the intercompany bonds.

Question

Paka Corporation owns an 80% interest in Sandra Company.Paka acquired Sandra's bonds on January 2, 2011.The following information is from the adjusted trial balances at December 31, 2011, at which time the bonds have three years to maturity.The bonds have interest payment dates of January 1 and July 1.Straight-line amortization is used by both companies.
  Required:
Prepare the necessary consolidation working paper entries on December 31, 2011 with respect to the intercompany bonds.

Quizplus · Accepted Answer

The Answer of Paka Corporation owns an 80% interest in Sandra Company.Paka acquired Sandra's bonds on January 2, 2011.The following information is from the adjusted trial balances at December 31, 2011, at which time the bonds have three years to maturity.The bonds have interest payment dates of January 1 and July 1.Straight-line amortization is used by both companies.
  Required:
Prepare the necessary consolidation working paper entries on December 31, 2011 with respect to the intercompany bonds.

Paka Corporation Owns an 80% Interest in Sandra Company