Consolidation Entries: Intercompany Loan & Interest Ply Inc. owns 100% of Stry Inc.’s common stock. On 11/1/06, Ply lent $100,000 to Stry. The loan is to be repaid on 1/30/07 along with

$3,000 of interest. All aspects of the intercompany transaction were properly recorded by each company in its separate books.

1. What amounts should be reported in each company’s separate 2006 income statement and 12/31/06 balance sheet (asset and liability sections only)? Use the following format:

Consolidation Entries Account Ply Inc. Stry Inc. Dr. Cr. Consolidated 2. Prepare and post to your format the consolidation entries as of 12/31/06, relating only to these accounts.