On January 1, 2009, Mona, Inc., acquired 80 percent of Lisa Company’s common stock as well as 60 percent of its preferred shares. Mona paid $65,000 in cash for the preferred stock, with a call value of 110 percent ofthe $50 per share par value. The remaining 40 percent of the preferred shares traded at a $34,000 fair value. Mona paid $552,800 for the common stock. At the acquisition date, the noncontrolling interest in the common stock had a fair value of $138,200. Any excess fair value over Lisa’s book value was attributed to franchise contracts of $40,000. This intangible asset is being amortized over a 40-year period. Lisa pays all preferred stock dividends (a total of $8,000 per year) on an annual basis. During 2009, Lisa’s book value increased by $50,000. LO4 On January 2, 2009, Mona acquired one-half of Lisa’s outstanding bonds payable to reduce the business combination’s debt position. Lisa’s bonds had a face value of $100,000 and paid cash inter¬ est of 10 percent per year. These bonds had been issued to the public to yield 14 percent. Interest is paid each December 31. On January 2, 2009, these bonds had a total $88,350 book value. Mona paid $53,310, indicating an effective interest rate of 8 percent.

On January 3,2009, Mona sold Lisa fixed assets that had originally cost $100,000 but had accu¬ mulated depreciation of $60,000 when transferred. The transfer was made at a price of $120,000. These assets were estimated to have a remaining useful life of 10 years.