On January 1, 20X1, Fern Corporation paid Morton Advertising $116,200 to acquire 70 percent of Vincent Company's stock. Fern also paid $45,000 to acquire $50,000 par value 8 percent, 10-year bonds directly from Vincent on that date. This purchase represented ½ of the bonds that were originally issued. Interest payments are made on January 1 and July 1. The fair value of the noncontrolling interest at January 1, 20X1, was $49,800, and book value of Vincent's net assets was $110,000. The book values and fair values of Vincent's assets and liabilities were equal except for buildings and equipment, which had a fair value $56,000 higher than book value and a remaining economic life of 14 years at January 1, 20X1. The trial balances for the two companies as of December 31, 20X3, are as follows:

On July 1, 20X2, Vincent sold land that it had purchased for $17,000 to Fern for $25,000. Fern continues to hold the land at December 31, 20X3. Assume Fern Corporation uses the fully adjusted equity method.

Required
a. Record the journal entries for 20X3 on Fern's books related to its investment in Vincent's stock and bonds.
b. Record the entries for 20X3 on Vincent's books related to its bond issue.
c. Prepare elimination entries needed to complete a consolidation worksheet for 20X3.
d. Prepare a three-part consolidation worksheet for20X3.

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Fern Corporation Debit Vincent Company Debit ltem Credit Credit S 46,000 Cash & Current Receivables Inventory Land, Buildings, & Equipment (net) Investment in Vincent Bonds Investment in Vincent Stock Discount on Bonds Payable Operating Expenses Interest Expense Dividends Declared Current Liabilities Bonds Payable Common Stock Retained Earnings Sales Interest Income Income from Subsidiary S 30,300 170,000 320,000 46,046 144,835 180,000 4 198,500 27,000 60,000 7,908 161,000 8,764 10,000 $ 35,000 300,000 100,000 238,934 300,000 33,000 100,000 50,000 100,672 200,000 18,365 996,68 $996,681 $483,672 $483,672