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, 2012, Sanatee sold $1,400,000 in ten-year bonds to the public at 108. The bonds pay a 10% interest rate every December 31. Fargus acquired 40% of these bonds on January 1, 2014, for 95% of the face value.

A. Assuming Both companies utilized the straight-line method of amortization what consolidation entry would be required with these intra-entity bonds on December, 31, 2014, and 2015 ?

B. Assuming Both companies utilize effective rate method, what consolidation entry would be necessary December 31, 2014 and 2015?