Cairns owns 70 percent of the voting stock of Hamilton, Inc. Theparent’s interest was...

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Accounting

Cairns owns 70 percent of the voting stock of Hamilton, Inc. Theparent’s interest was acquired several years ago on the date thatthe subsidiary was formed. Consequently, no goodwill or otherallocation was recorded in connection with the acquisition. Cairnsuses the equity method in its internal records to account for itsinvestment in Hamilton.
On January 1, 2014, Hamilton sold $1,100,000 in 10-year bonds tothe public at 110. The bonds had a cash interest rate of 8 percentpayable every December 31. Cairns acquired 45 percent of thesebonds at 92 percent of face value on January 1, 2016. Bothcompanies utilize the straight-line method of amortization.
Prepare the consolidation worksheet entries to recognize theeffects of the intra-entity bonds at each of the following dates.(If no entry is required for a transaction/event, select"No journal entry required" in the first accountfield.)
December 31, 2016
December 31, 2017
December 31, 2018

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In: AccountingCairns owns 70 percent of the voting stock of Hamilton, Inc. Theparent’s interest was acquired...Cairns owns 70 percent of the voting stock of Hamilton, Inc. Theparent’s interest was acquired several years ago on the date thatthe subsidiary was formed. Consequently, no goodwill or otherallocation was recorded in connection with the acquisition. Cairnsuses the equity method in its internal records to account for itsinvestment in Hamilton.On January 1, 2014, Hamilton sold $1,100,000 in 10-year bonds tothe public at 110. The bonds had a cash interest rate of 8 percentpayable every December 31. Cairns acquired 45 percent of thesebonds at 92 percent of face value on January 1, 2016. Bothcompanies utilize the straight-line method of amortization.Prepare the consolidation worksheet entries to recognize theeffects of the intra-entity bonds at each of the following dates.(If no entry is required for a transaction/event, select"No journal entry required" in the first accountfield.)December 31, 2016December 31, 2017December 31, 2018