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Fernanndo Eriawan (1110082000129)
Fernanndo Eriawan (1110082000129)
E7-13
1 Gain on constructive retirement of bonds: Purchase price of bonds Book value Gain on constructive retirement of bonds 48.800 50.000 1.200
2 Son accounts for its investment in Pap bonds Jan 2, 2013 Investment in Pap bonds Cash
48.800 48.800
July 1, 2013 Cash Investment in Pap bonds Interest Income December 31, 2013 Interest receivable Investment in Pap bonds Interest income 3 Pap accounts for its bonds payable July 1, 2013 Interest expense Cash December 31, 2013 Interest expense
4.000 4.000
4.000
Interest payable
4.000
Investment in Son Income from Son (80% x $50.000) + 1.200(constructive gain) 400(piecemeal recognition of gain).
40.800 40.800
5 Noncontrolling interest share (50,000 x 20%) Controlling share of NI (200,000 + 40,800) Consolidated Net Income (10,000 + 240,800)