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  3. several years ago brant, inc., sold $960,000 in bo

Several years ago Brant, Inc., sold $960,000 in bonds to the public. Annual cash interest of 9...

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Advance Math

Several years agoBrant, Inc., sold $960,000 in bonds to the public. Annual cashinterest of 9 percent ($86,400) was to be paid on this debt. Thebonds were issued at a discount to yield 12 percent. At thebeginning of 2016, Zack Corporation (a wholly owned subsidiary ofBrant) purchased $160,000 of these bonds on the open market for$181,000, a price based on an effective interest rate of 7 percent.The bond liability had a carrying amount on that date of $930,000.Assume Brant uses the equity method to account internally for itsinvestment in Zack.

  1. a. &b. What consolidation entry would be required for thesebonds on December 31, 2016 and December 31, 2018?

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