Question
Farley Corporation owns 70 percent of Snowball Enterprises stock. On January 1, 20X1, Farley sold $1.17 million par value, 6 percent (paid semiannually), 20-year, first
Farley Corporation owns 70 percent of Snowball Enterprises stock. On January 1, 20X1, Farley sold $1.17 million par value, 6 percent (paid semiannually), 20-year, first mortgage bonds to Kling Corporation at 96. On January 1, 20X8, Snowball purchased $351,000 par value of the Farley bonds directly from Kling for $348,880.
Required: Prepare the consolidation entry needed at December 31, 20X8, to remove the effects of the intercorporate bond ownership in preparing consolidated financial statements.
entry
Bonds payable | ------ | |
Interest income | ------ | |
Loss on constructive bond retirement | ------ | |
investment in corporation bonds | ------ | |
Interest expense | ------ | |
Discount on bonds payable | ------ |
Please write the correct answer and calculation
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