8) Subsidiary purchase of Parent Company Outstanding Bonds: Paent Inc. had $600,000 par of 8%...
60.1K
Verified Solution
Link Copied!
Question
Accounting
8) Subsidiary purchase of Parent Company Outstanding Bonds:
Paent Inc. had $600,000 par of 8% bonds payable outstanding on January 1, 2011 due January 1, 2015 with an unamortized discount of $20,000. Subsidiary is a 90%-owned subsidiary of Paent. On January 2, 2011, Subsidiary Corporation purchased $180,000 par value of Paent's outstanding bonds for $165,000. The bonds have interest payment dates of January 1 and July 1. Straight-line amortization is used.
With respect to the bond purchase, What is the amount of the total gain or (loss) that will be shown on the consolidated income statement of Paent Corporation and Subsidiary for 2011? What is the amount of the parent share of the Gain or loss?
Computations:
% of bonds purchased
30%
Book Value of Bonds
Price paid for Bonds
Total Gain/(Loss)
Parent share of G/(L)
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
