Fargus Corporation Owned 51% of the Voting Common Stock of Sanatee

question 26

Essay

Fargus Corporation owned 51% of the voting common stock of Sanatee, 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 price. On January 1, 2020, Sanatee sold $1,400,000 in ten-year bonds to the public at 108. The bonds pay a 10% interest rate every December 31. Fargus acquired 40% of these bonds on January 1, 2022, for 95% of the face value. Both companies utilized the straight-line method of amortization.What balances would need to be considered in order to prepare the consolidation entry in connection with these intra-entity bonds at December 31, 2022, the end of the first year of the intra-entity investment? Prepare schedules to show numerical answers for balances that would be needed for the entry.

Identify the requirements for valid acceptance and the effects of various acceptance methods.

Comprehend the factors affecting the enforceability of agreements not in writing.

Analyze the role and characteristics of formal contracts such as contracts under seal and letters of credit.

Explain the mirror-image rule and the mailbox rule in the context of agreement formation.

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Definitions:

Empathetic Reflection

A therapeutic practice where the therapist mirrors the client's emotions and thoughts back to them to deepen understanding and emotional connection.

Locus of Evaluation

Refers to where an individual's standards for judgment are located, whether internally (self-determined values) or externally (societal or others' expectations).

Catharsis

A psychological release through which an individual expresses or relieves emotional tension, often leading to a state of renewal and restoration.

Gestalt Therapy

A form of psychotherapy that emphasizes personal responsibility and focuses on the individual's experience in the present moment.