Fargus Corporation owned 51% of the voting common stock of Sanatee, Inc. The parent's 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 price. On January 1, 2010, Sanatee sold $1,400,000 in ten-year bonds to the public at 108. The bonds pay a 10% interest rate every December 31 and were sold to yield 8.76624%.Fargus acquired 40% of these bonds on January 1, 2012, for 95% of the face value. Based upon this purchase price, Fargus will receive a 10.9706% return on its investment. Both companies utilized the effective interest method of amortization.Fargus accounts for its investment in Sanatee using the initial value method.

REQUIRED:

(1) In good form, prepare amortization schedules through December 31, 2015 for both the parent and subsidiary, rounding all figures to the nearest dollar. ** HAVE TO USE EFFECTIVE INTEREST METHOD OF AMORTIZATION NOT STRAIGHT LINE

(2)In good form, prepare the consolidation elimination entries needed in connection with these intra-entity bonds at December 31, 2012.

(3)In good form, prepare the consolidation elimination entries needed in connection with these intra-entity bonds at December 31, 2015.