What are the journal entries for an indirect intercompany debt transaction where Company A has a note payable and accrued interest payable to XYZ, an unrelated party, and B Company, a company affiliated with A Company, has acquired the debt via a note payable to XYZ for the total of the principal and accrued interest owed by Company A?

#1;
I guess; Cash XXXX
N/P XXXXX

Interest Exp. XXXX
Interest payable XXXX




#2;When a note or bond payable is sold directly to an affiliate at par value, the entries recorded by the investor and the issuer should be mirrorimages of each other.


Bonds Payable $XXXX
Investment in Bonds $XXXX
To eliminate intercorporate bond holding



Interest Income $XXXX
Interest Expense $XXXX
To eliminate intercompany interest – income

Interest Payable $XXXXX
Interest Receivable $XXXXX
To eliminate intercompany interest

I guess you may contact a biookkeeper for the corp for more acuarate info in detail