Soft Limited Owns 70% of the Shares of Hard Co

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The Answer is Determine bonds payable balance on Hard's books at January 1,20X6 and December 31,20X6,using the effective interest rate method.

Determine bonds payable balance on Hard's books at January 1,20X6 and December 31,20X6,using the effective interest rate method. Balance at January 1,20X6 of $300,000 face value bonds is: 300/1,000 × $920,145 = $276,044 Balance at December 31,20X6 of $300,000 face value bonds is: 300/1000 × $933,757 = $280,127 Interest expense on $300,000 face value bonds in 20X6 300/1000 × $73,612= $22,083 Balance remaining for the $700,000 face value bonds: 700/1000 × 933,757 = $653,630 Bonds receivable balance on Soft's books,using the effective interest rate method to amortize: 20X6: Gain on redemption of bonds at time of purchase by Soft: Balance in the bonds payable would be:

Balance at January 1,20X6 of $300,000 face value bonds is:
300/1,000 × $920,145 = $276,044
Balance at December 31,20X6 of $300,000 face value bonds is:
300/1000 × $933,757 = $280,127
Interest expense on $300,000 face value bonds in 20X6
300/1000 × $73,612= $22,083
Balance remaining for the $700,000 face value bonds:
700/1000 × 933,757 = $653,630
Bonds receivable balance on Soft's books,using the effective interest rate method to amortize:

20X6: Gain on redemption of bonds at time of purchase by Soft:

Balance in the bonds payable would be:

Soft Limited Owns 70% of the Shares of Hard Co

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