Assume that Big Co$.$ acquired $70\%$ of Little Co stock on $1/1/23$ for $$350,000.$ The fair

value of the non$-$controlling interest was $$150,000$ on that date. Little's book value was

$$400,000$; they had common stock of $$100,000$ and Retained Earnings of $$300,000.$

The entire $$100,000$ differential was attributed to patents with a $5$ year remaining useful

life. In $2023$ Little reported earnings of $$40,000$ and paid no dividends.

On $1/1/23$ Big purchased $$100,000$ of bonds which Little had issued several years earlie

at par value. The bonds mature on $12/31/27(5$ years from $1/1/23),$ and pay interest of

$8\%$ annually each $\frac{12}{31}.$ Big purchased the bonds for $$92,418\mathrm{.}43,$ a yield of $10\%.$ Big

uses the effective interest method of amortization.

Required: Prepare consolidation$/$elimination entries for $2023$

Edit View Insert Format Tools Table