What gain or loss from the retirement should be reported

Assignment Help Accounting Basics

Reference no: EM131933231

Problem

Opus, Incorporated, owns 90 percent of Bloom Company. On December 31, 2013, Opus acquires half of Bloom's $620,000 outstanding bonds. These bonds had been sold on the open market on January 1, 2011, at a 12 percent effective rate. The bonds pay a cash interest rate of 10 percent every December 31 and are scheduled to come due on December 31, 2021. Bloom issued this debt originally for $546,373. Opus paid $345,629 for this investment, indicating an 8 percent effective yield.

1. Assuming that both parties use the effective rate method, what gain or loss from the retirement of this debt should be reported on the consolidated income statement for 2013?

Reference no: EM131933231

Questions Cloud

How much will be taxed to the recipient as a dividend : How much will be taxed to the recipient as a dividend? How much is a return of capital? Is any of the distribution a capital gain

Customer service-zappos : From the e-Activity, analyze the role that customer service plays and determine the service management skills at Zappos.

What role did jobs play : What do you think are the three most important factors in Apple's past success? Justify your answer.

Determine which insulation you will choose : The annual heat loss from the roof of a house is $520. You want to add some insulation on the roof to reduce your heating bill.

What gain or loss from the retirement should be reported : What gain or loss from the retirement of this debt should be reported on the consolidated income statement for 2013?

How would the introduction of beyond budgeting reduce : How would the introduction of beyond budgeting' reduce this problem of ‘minimalisation'? How does beyond budgeting relate to organisational architecture

Record the journal entries to record depreciation expense : Record the journal entries to record depreciation expense for 2017 and correct any errors made to date related to the information provided.

Calculate the net daily advantage of the system : If the lock box makes the cash available 2 days earlier, calculate the net daily advantage of the system. (Do not round intermediate calculations).

What should the budgeted production be for january : The ABC Company wishes to maintain a desired ending finished goods inventory of 20%, What should the budgeted production be for January

User Account

All Pages