Business, 07.06.2021 23:10 veve1787

Cairns owns 75 percent of the voting stock of Hamilton, Inc. The parent's interest was acquired several years ago on the date that the subsidiary was formed. Consequently, no goodwill or other allocation was recorded in connection with the acquisition. Cairns uses th equity method in its internal records to account for its investment in Hamilton. On January 1, 2017, Hamilton sold $1,200,000 in 10-year bonds to the public at 115. The bonds had a cash interest rate of 9 percent payable every December 31. Cairns acquired 40 percent of these bonds at 88 percent of face value on January 1, 2019. Both companies utilize the straight-line method of amortization.

Required:
Prepare the consolidation worksheet entries to recognize the effects of the intra-entity bonds.

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Cairns owns 75 percent of the voting stock of Hamilton, Inc. The parent's interest was acquired seve...

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