Purse Corporation owns 70 percent of Scarf Company's voting shares. On January 1, 20X3, Scarf...
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Purse Corporation owns 70 percent of Scarf Company's voting shares. On January 1, 20X3, Scarf sold bonds witha par value of $652,500 at 98. Purse purchased $435,000 par value of the bonds, the remainder was sold to nonaffiliates. The bonds mature in five years and pay an annual interest rate of 8 percent. Interest is paid semiannually on January 1 and July 1 Required a. What amount of interest expense should be reported in the 20x4 consolidated income statement? (Do not round your intermediate calculations. Round your final answer to nearest whole dollar) nterest expense b. Prepare the journal entries Purse recorded during 20x4 with regard to its investment in Scarf bonds. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations. Round your final answers to nearest whole dollar.) View transaction list Journal entry worksheet 2 Record the interest received on the bonds. Note: Enter debits before credits. Date General Journal Debit Credit January 1, 20X4
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