Assume that a Parent company acquires a 60% interest in its Subsidiary on January 1, 2020. On the date of acquisition, the fair value of the 60% controlling interest was $1,440,000 and the fair value of the 40% noncontrolling interest was $960,000. On January 1, 2020, the book value of net assets equaled $2,400,000 and the fair value of the identifiable net assets equaled the book value of identifiable net assets (i.e. there was no AAP or Goodwill). The parent uses the equity method to account for its investment in the subsidiary.

On December 31, 2021, the Subsidiary company issued $3,000,000 (face) 5 percent, five-year bonds to an unaffiliated company for $2,760,436. The bonds pay interest annually on December 31, and the bond discount is amortized using the straight-line method. This results in annual bond-payable discount amortization equal to $47,913 per year.

On December 31, 2023, the Parent paid $3,081,698 to purchase all of the outstanding Subsidiary company bonds. The bond premium is amortized using the straight-line method, which results in annual bond-investment premium amortization equal to $27,233 per year.

The Parent and the Subsidiary report the following financial statements for the year ended December 31, 2024:

Income Statement

	Parent	Subsidiary
Sales	1,100,000	800,000
COGS	(440,000)	(450,000)
Gross Profit	660,000	350,000
Income (loss) from subsidiary	91,398
Bond interest income	122,767
Bond interest expense		(197,913)
Operating expenses	(230,000)	(125,000)
Net income	$644,165	$27,087

Statement of Retained Earnings

	Parent	Subsidiary
BOY Retained earnings	4,000,000	450,000
Net income	644,165	27,087
Dividends	(200,000)	(25,000)
EOY Retained earnings	$4,444,165	$452,087

Balance Sheet

	Parent	Subsidiary
Assets:
Cash	1,750,000	800,000
Accounts receivable	800,000	750,000
Inventory	1,200,000	250,000
Equity investment	1,289,761
Investment in bonds	3,054,465
PPE, net	12,806,046	6,392,262
	$20,900,272	$8,192,262
Liabilities & Stockholders' Equity
Accounts payable	1,600,000	838,000
Current liabilities	2,200,000	1,100,000
Bonds payable		2,904,174
Long-term liabilities	2,226,100	950,000
Common stock	1,162,000	398,000
APIC	9,268,007	1,550,000
Retained earnings	4,444,165	452,087
	$20,900,272	$8,192,262

Required:

Provide the consolidation entries and prepare a consolidation worksheet for the year ended December 31, 2022.