question archive On January 1, 2020, Booker Inc
On January 1, 2020, Booker Inc
Subject:AccountingPrice: Bought3
On January 1, 2020, Booker Inc. purchases 1000 bonds issued by its 100% owned sub, Paul Co. Each bond has a par value of $1000 and a coupon rate of 5%. Paul originally issued 5000 of these bonds, and its 12/31/19 balance sheet listed total long-term debt of $5,100,000 (those bonds are the company's only debt). Booker paid $950,000 to acquire the bonds. From Paul's point of view, the bonds pay 4.54% interest and from Booker's point of view, the bond interest rate is 6.2%.
Provide the consolidation worksheet adjusting entry for the bonds and interest for 2020. Show all calculations following the entry.
