Cairns owns 75 percent of the voting stock of Hamilton, Inc. The parents interest was acquired several years ago on the date that the subsidiary was formed. Consequently, no goodwill or other allocation was recorded in connection with the acquisition. Cairns uses the equity method in its internal records to account for its investment in Hamilton.

On January 1, 2014, Hamilton sold $2,000,000 in 10-year bonds to the public at 110. The bonds had a cash interest rate of 8 percent payable every December 31. Cairns acquired 40 percent of these bonds at 92 percent of face value on January 1, 2016. Both companies utilize the straight-line method of amortization.

Prepare the consolidation worksheet entries to recognize the effects of the intra-entity bonds at each of the following dates. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

1. December 31, 2016 JE1

2. December 31, 2017 JE2

3. December 31, 2018 JE3

JE 1 Layout:

Date	Accounts	Debit	Credit
December 31, 2016	Bonds payable
	Premium on bonds payable
	Interest income
	Gain on retirement of bonds
	Interest expense
	Investment in bonds

JE2:

Date	Accounts	Debit	Credit
December 31, 2017	Bonds payable
	Interest income
	Premium on bonds payable
	Investment in Hamilton
	Interest expense
	Investment in bonds

JE3:

Date	Accounts	Debit	Credit
December 31, 2018	Bonds payable
	Interest income
	Premium on bonds payable
	Investment in bonds
	Interest expense
	Investment in Hamilton

This information is even more than the textbook question as I started answering it myself but got confused with the calculation and would like a walk through, there are also similar questions already posted with less than this information that have been answered successfully but do not give a breakdown of their calculation so I cannot follow and learn, so if you think more information is required you would be mistaken, please stop commenting and move onto a different question or go back to school.