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Question Sean Company issued 10-year, 10% bonds with par value of $800,000 on January 1, 2007, for $900,000. Interest is payable annually on December 31. On January 1, 2012, Pierre Company purchased all of Sean's bonds for $950,000. Sean is a 60% owned subsidiary of Pierre. Both companies use the straight-line method to amortize bond discounts and premiums.

a) Compute the total gain or loss on the retirement of the debt.

b) Prepare in general journal form the intercompany bond elimination entries for the consolidated statements workpaper prepared on December 31, 2012.

If you can please also show me how you get the numbers/total I would appreciate it. Thank you.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M92574466

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