Assume that a Parent company acquires a 75 percent interest in its Subsidiary on January 1, 2018. On the date of acquisition, the fair value of the 75 percent controlling interest was $480,000 and the fair value of the 25 percent noncontrolling interest was $160,000. On January 1, 2018, the book value of net assets equaled $640,000 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). On January 1, 2018, the retained earnings of the subsidiary was $120,000.

On December 31, 2019, the Subsidiary company issued $600,000 (face) 6 percent, five-year bonds to an unaffiliated company for $612,000. The bonds pay interest annually on December 31, and the bond premium is amortized using the straight line method. This results in annual bond-payable premium amortization equal to $2,400 per year. The following schedule provides the bond-amortization schedule from the initial issuance date.

Year	Cash Payment	Amortization of Premium	Interest Expense	Carrying Amount
Dec. 31, 2019				$612,000
Dec. 31, 2020	$36,000	$2,400	$33,600	609,600
Dec. 31, 2021	36,000	2,400	33,600	607,200
Dec. 31, 2022	36,000	2,400	33,600	604,800
Dec. 31, 2023	36,000	2,400	33,600	602,400
Dec. 31, 2024	36,000	2,400	33,600	600,000

On December 31, 2021, the Parent paid $588,000 to purchase all of the outstanding Subsidiary company bonds. The bond discount is amortized using the straight-line method, which results in annual bond-investment discount amortization equal to $4,000 per year. The following schedule provides the bond-amortization schedule for the Parent's bond investment.

Year	Cash Payment	Amortization of Discount	Interest Income	Carrying Amount
Dec. 31, 2021				$588,000
Dec. 31, 2022	$36,000	$4,000	$40,000	592,000
Dec. 31, 2023	36,000	4,000	40,000	596,000
Dec. 31, 2024	36,000	4,000	40,000	600,000

The parent uses the cost method of pre-consolidation investment bookkeeping. The Parent and the Subsidiary report the following financial statements for the year ended December 31, 2022:

				Parent	Subsidiary							Parent	Subsidiary
Income statement						Balance sheet
Sales				$5,200,000	$640,000		Assets
Cost of goods sold		(3,600,000)	(360,000)		Cash					$560,000	$240,000
Gross profit			1,600,000	280,000		Accounts receivable			640,000	400,000
Operating and other expenses	(1,200,000)	(160,000)		Inventories				800,000	640,000
Bond interest income		40,000	-		PPE, net				2,400,000	1,000,000
Bond interest expense		-	(33,600)		Equity investment			480,000	-
Total expenses			(1,160,000)	(193,600)		Investment in bond, net			592,000	-
Income from subsidiary	24,000	-							$5,472,000	$2,280,000
Net income			$464,000	$86,400		Liabilities and stockholders' equity
Statement of retained earnings					Accounts payable			$640,000	$200,000
BOY retained earnings		$608,000	$220,800		Other current liabilities			720,000	320,000
Net income			464,000	86,400		Bond payable (net)				-	604,800
Dividends			(160,000)	(32,000)		Other long-term liabilities			1,120,000	360,000
Ending retained earnings	$912,000	$275,200		Common stock				480,000	120,000
									APIC					1,600,000	400,000
									Retained earnings			912,000	275,200
														5,472,000	2,280,000

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

Round answers to the nearest whole number.

Consolidation Journal
	Description	Debit	Credit
[ADJ]	Investment in Subsidiary	Answer 2	0
	BOY Retained earnings-	0	Answer 6
[C]	Income from subsidiary	24000	0
	Income attributable to NCI	21600	0
	Dividends-Subsidiary	0	32000
	Noncontrolling Interest	0	answer
[E]	Common Stock (Subsidiary)	120000	0
	APIC (Subsidiary)	400000	0
	BOY Retained earnings- Subsidiary	220800	0
	Investment in Subsidiary	0	Answer 26
	Noncontrolling interest	0	Answer 28
[Ibond]	Bond payable, net	604800	0
	Interest income	40000	0
	Investment in bonds, net	0	592000
	Interest expense	0	33600
	Investment in Subsidiary	0	19200