Assume the same facts as in Exercise, but in addition, assume that Saratoga is itself in need

Question:

Assume the same facts as in Exercise, but in addition, assume that Saratoga is itself in need of cash. It discounts the note received from Windsor at First Bank on July 1, 2013, at a of 8% per annum.
In Exercise, Saratoga Company owns 80% of the outstanding of Windsor Company. On May 1, 2013, Windsor Company arranges a 1-year, $50,000 loan from Saratoga Company. The loan agreement specifies that interest will accrue at the rate of 6% per annum and that all interest will be paid on the date of the loan. The financial reporting period ends on December 31, 2013, and the note originating from the loan remains outstanding.
1. Prepare the entries that both companies would have made on their separate books, including interest accruals.
2. Prepare the eliminations, in entry form, that will be made on a consolidated worksheet prepared as of December 31, 2013.
Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...