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Amazing Corporation purchased $100,000 par value bonds of its subsidiary, Broadway Company, on December 31, 20X5, from Lemon Corporation for $102,800 The 10-year bonds bear

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Amazing Corporation purchased $100,000 par value bonds of its subsidiary, Broadway Company, on December 31, 20X5, from Lemon Corporation for $102,800 The 10-year bonds bear a 9 percent coupon rate, and Broadway originally sold them on January 1, 20X3, to Lemon at 95. Interest is paid annually on December 31. Amazing owns 85 percent of the stock of Broadway In preparing the consolidation worksheet at December 31, 20X6, Amazing's controller made the following entry to eliminate the effects of the intercorporate bond ownership Consolidation Worksheet Entries Bonds Payable Interest Income Retained Earnings, January 1 Noncontrolling Interest 100,000 8,691 5,741 1,013 Investment in Broadway Company Bonds Discount on Bonds Payable Interest Expense 02,491 3.535 9419 Required: With the information given, answer the following questions a. Prepare the journal entry made by Amazing in 20x6 to record its interest income on the Broadway bonds that it holds. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermedlate calculations. Round your final answers to nearest whole dollar View transaction list Journal entry worksheet Record the entry for interest income. Note: Enter debits before credits. Event Debit Credit Cash 9.000 nvestment in Broadway Comparry bonds b. Prepare the consolidation entry to remove the effects of the intercorporate bond ownership in completing ransactionlevent, select "No journal entry required" in the first account field. Do not round your intermediate calculations. Round your final answers to nearest whole dollar) view transaction list Consolidation Worksheet Entries Record the entry to eliminate the effects of the intercompany ownership in bonds. Note: Enter debits before credits. Debit Credit 100,000 Event Accounts s payable Loss on bond retirement Investment in Broadway Company bonds Discount on bonds payable 102,800 Record entry Clear entry view cons entries

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