intra entity debt transfer: company can borrow from other company

parent acquires subsidiary's debt

subsidiary acquires parent's debt

interest rate:

nominal stated rate: agreed for cash interest paid a receives

yield/market/effective rate: income/expense will be returning

interest expense: cash paid + discount

100000
a. december 31, 2019

bonds payable
premium on bonds payable
interest income
investment in bonds
interest expense
gain on retirement of bonds

try b and c
a. gain 12,000 on the sale of a building: depreciation expense; increase the cash under net cash provided by ope

b. intra-entity inventory transfers of 129,000 occurred during the current period:

nder net cash provided by operating activities
 ALFORD COMPANY AND KNIGHT COMPANY
Consolidated Statement of Cash Flows
For the year Ended December 31, 2020

Consolidated net income 200000 net income calculation:

Depreciation and amortization expense 50000 revenues
decrease in accounts receivable 11000 cogs
decrease in accounts payable depreciation and amortization
other expenses
consolidated net income
e calculation:
730000
440000
on and amortization 50000
40000 530000
ted net income 200000