Question: On 1/1/1999 Batman Co. purchased all of the outstanding shares of Superman Company at book value Superman Company doesn't pay dividends and Batman Company uses the initial value method for its investment in Superman
On 1/1/2013 Superman Company issued $1,000,000 8% 20 year bonds for $940,000. Superman uses straight line amortization of the discount. These bonds pay interest annually on January 1st.
On 1/1/2015 Batman purchased 1/2/ of the Superman Company bonds in the market place for $482,000. Batman also uses straight line amortization for its investment in bonds
Again, batman and superman had no transactions with each other except for the bond transactions
Required: A) Make the journal entry superman made when it sold the bonds
B) Make the entry superman makes on december 31 for accruing interest
C) Make the entry batman makes when it buys the bonds
D) Make the entry batman makes on december 31 to accure interest