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On January 1, 2018, Access IT Company exchanged $1,020,000 for 30 percent of the outstanding voting stock of Net Connect. Especially attractive to Access IT was a research project underway at Net Connect that would enhance both the speed and quantity of client-accessible data. Although not recorded in Net Connect's financial records, the fair value of the research project was considered to be $2,720,000 In contractual agreements with the sole owner of the remaining 70 percent of Net Connect, Access IT was granted (1) various decision- making rights over Net Connect's operating decisions and (2) special service purchase provisions at below-market rates. As a result of these contractual agreements, Access IT established itself as the primary beneficiary of Net Connect. Immediately after the purchase, Access IT and Net Connect presented the following balance sheets: Access IT Net Connect Cash 63,800 $ 43,000 Investment in Net Connect 1,020,000 Capitalized software 983,000 158,800 Computer equipment 1,068,000 Communications equipment 918,000 338,000 Patent 193,000 Total assets $ 4,652,000 $ 790,000 Long-tern debt $(943, 800) $ (618,000) Common stock-Access IT (2,680,000) Common stock-Net Connect (43,000) Retained earnings (429,000) (129,000) Total liabilities and equity $(4,052,000) $(790,000) $ 58,000 Each of the above amounts represents a fair value at January 1, 2018. The fair value of the 70 percent of Net Connect shares not owned by Access IT was $2,380,000 Prepare an acquisition date consolidated worksheet for Access IT and its variable interest entity. (For accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Amounts in the Debit and Credit columns should be entered as positive. Negative amounts for the NCI and Consolidated Totals columns should be entered with a minus sign.) ACCESS IT COMPANY AND NET CONNECT mework Prepare an acquisition-date consolidated worksheet for Access IT and its variable interest entity. (For accounts where multipl consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the workshe Amounts in the Debit and Credit columns should be entered as positive. Negative amounts for the NCI and Consolidated columns should be entered with a minus sign.) Consolidated ACCESS IT COMPANY AND NET CONNECT Consolidation Worksheet January 1, 2018 Consolidation Entries Access IT Net Connect Debit Credit $ 63,000 $ 43,000 1,020,000 983,000 158,000 1,068,000 58,000 918,000 338,000 NCI Balances 193,000 Cash Investment in NetConnect Capitalized software Computer equipment Communications equipment Research and development asset Patent Goodwill Total assets Long-term debt Common stock-Access IT Common stock-NetConnect Retained earnings Noncontrolling interest Total liabilities and equity $ 4,052,000 $ $ (943,000) $ (2.680,000) 790,000 (618,000) $ (429,000) (43,000) (129,000) $ (4,062,000) $ (790,000) $ 0 $ $ 0 Cairns owns 75 percent of the voting stock of Hamilton, Inc. The parent's interest was acquired several years ago on the date that the subsidiary was formed. Consequently, no goodwill or other allocation was recorded in connection with the acquisition. Cairns uses the equity method in its internal records to account for its investment in Hamilton On January 1, 2014, Hamilton sold $1,700,000 in 10-year bonds to the public at 105. The bonds had a cash interest rate of 10 percent payable every December 31. Cairns acquired 35 percent of these Bonds at 96 percent of face value on January 1, 2016. Both companies utilize the straight-line method of amortization. Prepare the consolidation worksheet entries to recognize the effects of the intra-entity bonds at each of the following dates. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) a. December 31, 2016 b. December 31, 2017 c. December 31, 2018 Answer is complete but not entirely correct. No Date Accounts Debit Credit 1 December 31, 201 Bonds payable Premium on bonds payable Interest income Investment in bonds Interest expense Gain on retirement of bonds 595,000 20.825 50,575 OOOOO 547,175 44,625 47,600 2 December 31, 201 Bonds payable Premium on bonds payable Intretine 595,000 17,850 an a Answer is complete but not entirely correct. Debit Credit No 1 Date Accounts December 31, 201 Bonds payable Premium on bonds payable Interest income Investment in bonds 595,000 20,825 50,575 Interest expense Gain on retirement of bonds 547,175 44,625 47,600 2 December 31, 201 Bonds payable Premium on bonds payable Interest income Investment in bonds Interest expense Investment in Hamilton 595,000 17,850 20,825 577,150 44,625 71,400 3 December 31, 201 Bonds payable Premium on bonds payable Interest income Investment in bonds Interest expense Investment in Hamilton 595,000 14,875 fu20,825 580,125 44,625 95,200 (Dras