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Lamar Corporation owns 60 percent of Humbolt Corporation's voting shares. On January 1, 20X2, Lamar Corporation sold $170,000 par value, 8 percent first mortgage bonds
Lamar Corporation owns 60 percent of Humbolt Corporation's voting shares. On January 1, 20X2, Lamar Corporation sold $170,000 par value, 8 percent first mortgage bonds to Humbolt for $177,000. The bonds mature in 10 years and pay interest semiannually on January 1 and July 1. Required: a. Prepare the journal entries for 20X2 for Humbolt related to its ownership of Lamar's bonds. (Do not round your intermediate calculations. Round your final answers to nearest whole dollar.) View transaction list View journal entry worksheet No 1 Date General Journal January 1, 20X2 Investment in Lamar Corporation bonds Cash 2 July 1, 20X2 Cash Interest income Investment in Lamar Corporation bonds 3 December 31, 20X2 Interest receivable Interest income Investment in Lamar Corporation bonds b. Prepare the journal entries for 20X2 for Lamar related to the bonds. (Do not round your intermediate calculations. Round your final answers to nearest whole dollar.) View transaction list View journal entry worksheet No Date General Journal 1 January 1, 20X2 Cash Bonds payable Bond premium 2 July 1, 20X2 Interest expense Bond premium Cash 3 December 31, 20X2 Interest expense Bond premium Interest payable c. Prepare the worksheet elimination entries needed on December 31, 20X2, to remove the effects of the intercorporate ownership of bonds. (Do not round your intermediate calculations. Round your final answers to nearest whole dollar.) View transaction list View journal entry worksheet No 1 Event 1 Worksheet Entries Bonds payable Bond premium Interest income Investment in Lamar Corporation bonds Interest expense 2. 2 Interest payable Interest receivable
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