Camerons Inc. sold $1,000,000 ten-year bonds to the public at 104 on January 1, 2022....
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Camerons Inc. sold $1,000,000 ten-year bonds to the public at 104 on January 1, 2022. The stated interest rate was 9% was to be paid on this debt. On January 1, 2023, Blue Mountain Corporation (a wholly owned subsidiary of Camerons) purchased $500,000 of these bonds on the open market for $482,000, a price based on an effective interest rate of 7 percent. Any premium or discount is amortized on a straight-line basis. Assume Cameron owns 70 % of Blue Mountain and it uses the equity method to account internally for its investment in Blue Mountain.
What consolidation entry would be required for these bonds on: a. December 31, 2023?
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