Question
In: Accounting
Cairns owns 70 percent of the voting stock of Hamilton, Inc. The parent’s interest was acquired...
Cairns owns 70 percent of the voting stock of Hamilton, Inc. The parent’s interest was acquired several years ago on the date that the subsidiary was formed. Consequently, no goodwill or other allocation was recorded in connection with the acquisition. Cairns uses the equity method in its internal records to account for its investment in Hamilton. On January 1, 2014, Hamilton sold $1,900,000 in 10-year bonds to the public at 110. The bonds had a cash interest rate of 8 percent payable every December 31. Cairns acquired 45 percent of these bonds at 92 percent of face value on January 1, 2016. Both companies utilize the straight-line method of amortization. Prepare the consolidation worksheet entries to recognize the effects of the intra-entity bonds at each of the following dates. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
December 31, 2016
December 31, 2017
December 31, 2018
December 31, 2016
Bonds payable
Premium on bonds payable
Interest income
Investment in bonds
Interest expense
Gain on retirement of bonds
2December 31, 2017
Bonds payable
Premium on bonds payable
Interest income
Investment in bonds
Interest expense
Investment in Hamilton
3December 31, 2018
Bonds payable
Premium on bonds payable
Interest income
Investment in bonds
Interest expense
Investment in Hamilton
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Cairns owns 70 percent of the voting stock of Hamilton, Inc. The parent’s interest was acquired...
Cairns owns 70 percent of the voting stock of Hamilton, Inc. The
parent’s interest was acquired several years ago on the date that
the subsidiary was formed. Consequently, no goodwill or other
allocation was recorded in connection with the acquisition. Cairns
uses the equity method in its internal records to account for its
investment in Hamilton.
On January 1, 2014, Hamilton sold $2,500,000 in 10-year bonds to
the public at 105. The bonds had a cash interest rate of 10...
Cairns owns 70 percent of the voting stock of Hamilton, Inc. The parent’s interest was acquired...
Cairns owns 70 percent of the voting stock of Hamilton, Inc. The
parent’s interest was acquired several years ago on the date that
the subsidiary was formed. Consequently, no goodwill or other
allocation was recorded in connection with the acquisition. Cairns
uses the equity method in its internal records to account for its
investment in Hamilton.
On January 1, 2014, Hamilton sold $1,100,000 in 10-year bonds to
the public at 110. The bonds had a cash interest rate of 8...
Cairns owns 70 percent of the voting stock of Hamilton, Inc. The parent’s interest was acquired...
Cairns owns 70 percent
of the voting stock of Hamilton, Inc. The parent’s interest was
acquired several years ago on the date that the subsidiary was
formed. Consequently, no goodwill or other allocation was recorded
in connection with the acquisition. Cairns uses the equity method
in its internal records to account for its investment in
Hamilton.
On January 1, 2014,
Hamilton sold $2,300,000 in 10-year bonds to the public at 110. The
bonds had a cash interest rate of 9...
Cairns owns 70 percent of the voting stock of Hamilton, Inc. The parent’s interest was acquired...
Cairns owns 70 percent of the voting stock of Hamilton, Inc. The
parent’s interest was acquired several years ago on the date that
the subsidiary was formed. Consequently, no goodwill or other
allocation was recorded in connection with the acquisition. Cairns
uses the equity method in its internal records to account for its
investment in Hamilton.
On January 1, 2014, Hamilton sold $1,100,000 in 10-year bonds to
the public at 110. The bonds had a cash interest rate of 8...
Cairns owns 70 percent of the voting stock of Hamilton, Inc. The parent’s interest was acquired...
Cairns owns 70 percent of the voting stock of Hamilton, Inc. The
parent’s interest was acquired several years ago on the date that
the subsidiary was formed. Consequently, no goodwill or other
allocation was recorded in connection with the acquisition. Cairns
uses the equity method in its internal records to account for its
investment in Hamilton.
On January 1, 2014, Hamilton sold $1,100,000 in 10-year bonds to
the public at 110. The bonds had a cash interest rate of 8...
Cairns owns 80 percent of the voting stock of Hamilton, Inc. The parent’s interest was acquired...
Cairns owns 80 percent of the voting stock of Hamilton, Inc. The
parent’s interest was acquired several years ago on the date that
the subsidiary was formed. Consequently, no goodwill or other
allocation was recorded in connection with the acquisition. Cairns
uses the equity method in its internal records to account for its
investment in Hamilton.
On January 1, 2017, Hamilton sold $1,500,000 in 10-year bonds to
the public at 105. The bonds had a cash interest rate of 8...
Cairns owns 75 percent of the voting stock of Hamilton, Inc. The parent’s interest was acquired...
Cairns owns 75 percent of the voting stock of Hamilton, Inc. The
parent’s interest was acquired several years ago on the date that
the subsidiary was formed. Consequently, no goodwill or other
allocation was recorded in connection with the acquisition. Cairns
uses the equity method in its internal records to account for its
investment in Hamilton.
On January 1, 2014, Hamilton sold $2,600,000 in 10-year bonds to
the public at 105. The bonds had a cash interest rate of 9...
Cairns owns 80 percent of the voting stock of Hamilton, Inc. The parent’s interest was acquired...
Cairns owns 80 percent of the voting stock of Hamilton, Inc. The
parent’s interest was acquired several years ago on the date that
the subsidiary was formed. Consequently, no goodwill or other
allocation was recorded in connection with the acquisition. Cairns
uses the equity method in its internal records to account for its
investment in Hamilton.
On January 1, 2011, Hamilton sold
$1,500,000 in 10-year bonds to the public at 105. The bonds had a
cash interest rate of 8...
Cairns owns 75 percent of the voting stock of Hamilton, Inc. The parent’s interest was acquired...
Cairns owns 75 percent of the voting stock of Hamilton, Inc. The
parent’s interest was acquired several years ago on the date that
the subsidiary was formed. Consequently, no goodwill or other
allocation was recorded in connection with the acquisition. Cairns
uses the equity method in its internal records to account for its
investment in Hamilton.
On January 1, 2014, Hamilton sold $2,600,000 in 10-year bonds to
the public at 105. The bonds had a cash interest rate of 9...
Cairns owns 75 percent of the voting stock of Hamilton, Inc. The parent’s interest was acquired...
Cairns owns 75 percent of the voting stock of Hamilton, Inc. The
parent’s interest was acquired several years ago on the date that
the subsidiary was formed. Consequently, no goodwill or other
allocation was recorded in connection with the acquisition. Cairns
uses the equity method in its internal records to account for its
investment in Hamilton. On January 1, 2014, Hamilton sold
$2,200,000 in 10-year bonds to the public at 105. The bonds had a
cash interest rate of 8...
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