Porter Company purchased 60 percent ownership of Temple Corporation on January 1, 20X1, at underlying book value. On that date, Porter sold $80,000 par value 8 percent five-year bonds directly to Temple for $82,000. The bonds pay interest annually on December 31. Porter uses the basic equity method in accounting for its ownership of Temple. On December 31, 20X2, the trial balances of the two companies are as follows:

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a. Record the journal entry or entries for 20X2 on the books of Porter Company related to its investment in Temple Corporation.

b. Record the journal entry or entries for \(20 \mathrm{X} 2\) on the books of Porter Company related to its bonds payable.

c. Record the journal entry or entries for 20X2 on the books of Temple Corporation related to its investment in Porter Company Bonds.

d. Prepare the elimination entries needed to complete a consolidated workpaper for \(20 \mathrm{X} 2\).

e. Prepare a three-part consolidated workpaper for \(20 \mathrm{X} 2\).

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Item Cash and Accounts Receivable Inventory Buildings and Equipment Investment in Temple Corporation Stock Investment in Porter Porter Company Debit $ 80,200 120.000 500,000 102,000 Credit Temple Corporation Debit $ 40,000 Credit 65.000 300,000 Company Bonds Cost of Goods Sold 99.800 Depreciation Expense 25,000 Interest Expense 6.000 Dividends Declared 40.000 Accumulated Depreciation $175,000 Accounts Payable 68.800 Bonds Payable 80.000 Bond Premium 1.200 Common Stock 200.000 Retained Earnings 230.000 Sales 200.000 Interest Income 81,200 61.000 15,000 14.000 10.000 $ 75.000 41,200 200,000 100.000 50.000 114.000 6.000 Income from Subsidiary 18.000 $973,000 $973.000 $586,200 $586.200