E 7-6 Parent purchases subsidiary bonds Albert NL was a 90 percent subsidiary of Josh NL, acquired when the book value of Albert NL net assets was equal to its fair value. On January 1, 2014, Albert NL has 10 percent $2,000,000 par bonds with unamortized premium of

$200,000. The bonds will mature in 10 years. At this date, Josh NL purchased 20% of Albert NL’s bonds with price of

$450,000. The interest payment dates of the bonds are January 1 and July 1.

REQuIRED: Determine the amount that should be presented on the consolidated financial statements for the following accounts in 2014:

1. 10 percent bonds payable 2. Investment in Albert NL 3. Interest expense 4. Interest income