7. On January 1, Year 1 the Simpson Company issued a bond to the general public. The bond has a face value of $100,000 and it is to be paid back in five years. The market rate of interest is 10% and the stated rate is 12% and it is payable on December 31 of each year. The following information is available: Date Carry 10% Int. 12% Int. Amortization Premium Carry Value Expense Paid of Premium Value 1/1/yr 1 12/31/yr 1107,581 10,718 12,000 12/31/yr 2 106,339 10,634 12,000 12/31/yr 3 104,973 10,497 12,000 12/31/yr 4103,470 10,347 12,000 7,581 107,581 1,242 6,339 106,339 1,366 4,973 104,973 1,503 3,470 103,470 1,653 1,817 101,817 12/31/yr 5 101,817 10,183* 12,000 1,817 0 100.000 *adjusted by $1 due to rounding On January 1, Year 3 the Panson Company, who owns 100% of the Simpson Company, purchased the bonds in the open market when the market rate went up to 15%. The purchase price was $93,151. The following information is available: Date Carry 15% Int. 12% Int. Amortization Discount Investment Value Revenue Received Of Discount 1/1/yr 3 6,849 93,151 12/31/yr 393,151 13,973 12,000 1,973 4,876 95,124 12/31/yr 495,124 14,269 12,000 2,269 2,607 97,393 12/31/yr 597,393 14,607* 12,000 2,607 0 100,000 *adjusted by $2 due to rounding Prepare the working paper elimination journal entry for the year ended 12/31/yr 3 and for the year ended 12/31/yr 4