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Advanced Financial Accounting
Consolidation Entries. Newest 2026-
2027. Questions and Correct Answers.
Graded A
Consolidating Entry *B (year following transfer) - ANSRemove intra-entity
bonds and related interest accounts, as well as effect of discount/premium
on retained earnings:
Debit Bonds Payable at Face Value, Interest Income, and Retained
Earnings OR Premium on Bond Payable
Credit Investment in Bonds, Interest Expense, and Retained Earnings OR
Discount on Bond Payable
Consolidating Entry *C - ANSUsed for non-equity method to adjust
investment balance to EM balance:
Debit Investment in Sub
Credit Beginning Retained Earnings
Consolidating Entry *G - ANSReverse prior-year intra-entity transfer:
Debit Beginning Retained Earnings of Seller
Credit Cost of Goods Sold (COGS)
Consolidating Entry *GL - ANSEliminate effect of intra-entity land transfer
from a previous year:
1
Advanced Financial Accounting
Consolidation Entries. Newest 2026-
2027. Questions and Correct Answers.
Graded A
Consolidating Entry *B (year following transfer) - ANSRemove intra-entity
bonds and related interest accounts, as well as effect of discount/premium
on retained earnings:
Debit Bonds Payable at Face Value, Interest Income, and Retained
Earnings OR Premium on Bond Payable
Credit Investment in Bonds, Interest Expense, and Retained Earnings OR
Discount on Bond Payable
Consolidating Entry *C - ANSUsed for non-equity method to adjust
investment balance to EM balance:
Debit Investment in Sub
Credit Beginning Retained Earnings
Consolidating Entry *G - ANSReverse prior-year intra-entity transfer:
Debit Beginning Retained Earnings of Seller
Credit Cost of Goods Sold (COGS)
Consolidating Entry *GL - ANSEliminate effect of intra-entity land transfer
from a previous year:
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