Farley Corporation owns 70 percent of the stock of Snowball Enterprises. On January 1, 20X1, Farley Corporation sold \(\$ 1,000,000\) par value 7 percent, 20 -year, first mortgage bonds to Kling Corporation at 97 . On January 1, 20X8, Snowball Enterprises purchased \(\$ 300,000\) par value of the Farley Corporation bonds directly from Kling Corporation for \(\$ 296,880\).

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Prepare the eliminating entry needed at December \(31,20 \mathrm{X} 8\), to remove the effects of the intercorporate bond ownership in preparing consolidated financial statements.