On July 31, 2022, Planetwear Inc. loaned $600,000 to its subsidiary Solestruck Shoe Factory. The...
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- On July 31, 2022, Planetwear Inc. loaned $600,000 to its subsidiary Solestruck Shoe Factory. The loan carries an annual interest rate of 4 per- cent, due quarterly on October 31, January 31, April 30, and July 31 of each year. The loan principal is due July 31, 2024. You are preparing the consolidation working paper for Planetwear at December 31, 2023, the year-end for both companies. Solestruck has paid all interest as required. However, while Planetwear has made appropriate year-end adjustments to its accounts, Solestruck has neglected to do this. Required
a.
What balances appear in the December 31, 2023, trial balances of Planetwear and Solestruck?
b. Prepare the necessary adjusting entry needed on Solestruck's books prior to consolidation.
c. Prepare the eliminating entries, in journal entry form, at December 31, 2023.
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