Essay
The Planes Company owns 100% of the outstanding common stock of the Sands Company. Sands issued $100,000 of face value, 9%, 10-year bonds on January 1, 20X3, for $96,000. The discount is being amortized on a straight-line basis. On January 1, 20X8, Planes purchased all the bonds as an investment for $95,000.
Required:
Be specific in answering the following questions and include numerical explanations.
a.How will this bond issue be recorded and accounted for in 20X8 on the separate books of Planes and Sands?
b.How will this bond issue be accounted for on the 20X8 consolidated statements?
c.How will this bond issue be recorded and accounted for in 20X9 on the separate books of Planes and Sands?
d.How will this bond issue be accounted for on the 20X9 consolidated statements?
Correct Answer:
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a.
Planes will show the bonds as an inve...View Answer
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Correct Answer:
Verified
Planes will show the bonds as an inve...
View Answer
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