Patama Holdings owns 70% of Seagull Corporation.On January 1, 2011, Seagull acquires $1,000,000 of bonds originally issued by Patama on January 1, 2006.The bonds were issued at a stated rate of 5% for 10 years, for $960,000.Seagull purchased them for $990,000.Assume that both Patama and Seagull will use the straight-line method for any bond-related amortization.Annual interest is paid on December 31.
Required:
Complete the table below with respect to the account balances that Patama, Seagull and the consolidated entity would report on their respective financial statements.

Question

Quizplus · Accepted Answer

The Answer of Patama Holdings owns 70% of Seagull Corporation.On January 1, 2011, Seagull acquires $1,000,000 of bonds originally issued by Patama on January 1, 2006.The bonds were issued at a stated rate of 5% for 10 years, for $960,000.Seagull purchased them for $990,000.Assume that both Patama and Seagull will use the straight-line method for any bond-related amortization.Annual interest is paid on December 31.
Required:
Complete the table below with respect to the account balances that Patama, Seagull and the consolidated entity would report on their respective financial statements.

Patama Holdings Owns 70% of Seagull Corporation