Philadelphia Company (parent) owns 80% of the common stock of Seattle Company (s
ID: 2431490 • Letter: P
Question
Philadelphia Company (parent) owns 80% of the common stock of Seattle Company (subsidiaryi on an 1 2015, Seattle Company issued S200 000 of 10-year 6% bonds at face value. Interest is payab on 1st each year. On January 2-2016, Philadelphia Company purchased 100% of these bonds from bondholders for $209,000. outsider 21. What entry does Philadelphia record in its individual books to record interest on bonds for 2016 a. Debit Interest Receivable $12,000, Debit Investment in Seattle's Bonds $1,000, Credit Interest Income b. Debit Interest Receivable $12,000, Credit Interest Income $12,000. ?. Debit interest Receivable $9,600, credit Investment in Seattle's Bonds$800, credit interest income $13,000. $8,800. d. Debit Interest Receivable $12,000, Credit Investment in Seattle's Bonds $1,000, Credit Interest Income $11,000. 22. What entry does Seattle record in its individual books to record interest on bonds for 2016 Debit Interest Expense $11,000, Debit Premium on Bonds Payable $1,000, Credit Interest Payable $12,000. Debit Interest Expense $13,000, Credit Discount on Bonds Payable $1,000, Credit Interest Payable $12,000 Debit Interest Expense $12,000, Credit Interest Payable $12,000. None of these. a. b. c. d.Explanation / Answer
21 The jounral entry is b) Interest recievables a/c dr 12000 to Interest income 12000 22 The jounral entry is c) Interest expenses a/c dr 12000 to interest payable 12000 23 The jounral entry is c) debit loss on retirement bonds 8000 24 The jounral entry is d) Addition of 9000 gain on retirement of bonds 25 e) none of the these