Cartwright, Inc. has $1,000,000 of 10% bonds outstanding on December 31, 20X8. On January 1, 20X9, Adam Corp., an 80%-owned subsidiary of Cartwright, Inc., purchases a $250,000 part of Cartwright, Inc.'s outstanding bonds in the market for $245,000. Interest accrued by 12/31/X9 is $12,500.
Determine the eliminating entries necessary for the 20X9 consolidated financial statements.
Provide correct eliminating entries necessary for the 20X9 consolidated financial statements. 100%
Discuss when gains or losses on intercompany sales of depreciable assets should be recognized on a consolidated basis and describe the eliminating entry needed to adjust the consolidated financial statements when the purchasing affiliate sells a depreciable asset that was acquired from another affiliate.