13 padma corporation owns 70 of the outstanding stock of somega company on january 1 4307609

13 padma corporation owns 70 of the outstanding stock of somega company on january 1 4307609

13) Padma Corporation owns 70% of the outstanding stock of Somega Company. On January 1, 2010, Somega issued $2,000,000 in 6% bonds that matured on January 1, 2020. At the time of issuance, the bonds were sold at a premium of $250,000. At January 1, 2011, Padma purchased half of the bonds for $910,000, and constructively retired the debt. Annual interest is paid on December 31. Straight-line amortization is used by both companies.

Required:

Complete the table below with respect to the account balances that Padma, Somega and the consolidated entity would report on their respective financial statements.

Padma

Somega

Consolidated

Investment in Somega bonds — 12/31/10

Investment in Somega bonds — 12/31/11

Investment in Somega bonds — 12/31/12

Bonds Payable — 12/31/10

Bonds Payable — 12/31/11

Bonds Payable — 12/31/12

Premium on Bonds Payable — 12/31/10

Premium on Bonds Payable — 12/31/11

Premium on Bonds Payable — 12/31/12

Gain/(loss) on Retirement — 12/31/10

Gain/(loss) on Retirement — 12/31/11

Gain/(loss) on Retirement — 12/31/12

Interest Income — 12/31/10

Interest Income — 12/31/11

Interest Income — 12/31/12

Interest Expense — 12/31/10

Interest Expense — 12/31/11

Interest Expense — 12/31/12

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