Worksheet 5B Intercompany Investment in Bonds, Year of Acquisition; Straight-Line Method ofAmortization Cornpany P and Subsidiary Compa ny S Worksheet for Consolidated Balance Sheet For h?ar Ended December 3 1 2017 1 2 3 7 8 9 10 11 12 13 14 16 17 (Credi balance amounts are in parentheses.) Other Assets Interest Receivable Investment in Company S Stock (90%) Investment in Company S Bonds (1 ' Interest Payable Bonds Payable (8%) Common Stock ($10 par)Company P Retained Earnings, January , 2017Company P Common Stock ($10 S Retained Earnings, January 1 2017Company S Operating Revenue Operating Expense Interest Income Interest Expense Subsidiary Income Loss on Bond Retirement Trial Balance Company P 56,400 8,000 100,800 102,400 (100,000) (120,000) (100.000) 70,000 (6,800) (10.800) Company S 220O0 (8,cm) (100,000) (80mo) (20.000) (80.000) 60,000 8,000 Eliminations and Adjustments: ICY l) Eliminate the entry recording the parent's share of subsidiary net income for the current year. This entry returns the investment in Compony S stock account to its January , 2017, balance to aid the elimination process, Eliminate 90% of the subsidiary equity balances of January 1 ; 2017/ against the investment in stock account, No excess results. Eliminate intercompany interest revenue and expense. Eliminate the balance of the investment in bonds against the bonds payable- Note that the investment in bonds is at its yearend amortized balance, The loss On retirement at the date the bonds were purchased is calculated as Follows: Loss remaining at year-end: Investment in bonds ot December 3 1 2017 Less; Carrying value of bonds at December 31/ 2017 loss amortized during year; Interest expense eliminated Less: Interest revenue eliminated 2/ 2017 Eliminate intercompany interest payable and $102,400 100,000 $ 8,000 6,800 $2,400 $3,600