On January 1, 20X1, Elm Corporation paid Morton Advertising \(\$ 122,000\) to acquire 70 percent of the stock of Vincent Company. Elm Corporation also paid \(\$ 45,000\) to acquire \(\$ 50,000\) par value 8 percent 10 -year bonds directly from Vincent Company on that date. Interest payments are made on January 1 and July 1. The purchase price of the stock was \(\$ 45,000\) above book value and resulted from an increase in the value of depreciable assets held by Vincent. The assets had an estimated remaining economic life of 15 years on January 1, 20X1.

The trial balances for the two companies as of December 31, 20X3, are as follows:

On July 1, 20X2, Vincent Company sold land which it had purchased for \(\$ 17,000\) to Elm Corporation for \(\$ 25,000\). Elm continues to hold the land at December 31, 20X3.
\section*{Required}

a. Record the journal entries for \(20 \times 3\) on the books of Elm Corporation related to its investment in Vincent Company's stock and bonds.

b. Record the entries for \(20 \times 3\) on the books of Vincent Company related to its bond issue.

c. Prepare elimination entries needed to complete a consolidation workpaper for 20X3.

d. Prepare a three-part consolidation workpaper for 20X3.

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Elm Corporation Item Debit Credit Cash and Accounts Receivable $ 24,500 Inventory 170,000 Land, Buildings, and Equipment (net) 320,000 Vincent Company Debit $ 46,000 70.000 180,000 Credit Investment in Vincent Bonds 46,500 Investment in Vincent Stock 155,000 Discount on Bonds Payable Operating Expenses Interest Expense Dividends Declared Current Liabilities Bonds Payable Common Stock Retained Earnings Sales Interest Income Income from Subsidiary Total 198,500 7,000 161,000 27.000 9,000 60,000 10.000 $ 35,000 $ 33.000 300,000 100.000 100,000 50.000 244.000 100.000 300.000 4.500 18,000 $1,001,500 $1,001,500 $483.000 $483.000 200.000