Mega Corporation purchased 90 percent of Tarp Company's voting common shares on January 1, 20X2, at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 10 percent of the book value of Tarp Company. Mega also purchased $86,000 of 6 percent, five-year bonds directly from Tarp on January 1, 20X2, for $90,000. The bonds pay interest annually on December 31. The trial balances of the companies as of December 31, 20x4, are as follows Mega Corporation Tarp Company Item Debit $ 26,000 167,000 401,000 133,056 87,600 77,000 18,000 15,160 Debit $ 40,600 76,000 241,000 Credit dit Cash & Receivables Inventory Buildings & Equipment Investment in Tarp Company Stock Investment in Tarp Company Bonds Cost of Goods Sold Depreciation Expense Interest Expense Dividends Declared Accumulated Depreciation Current Payables Bonds Payable Bond Premium Common Stock Retained Earnings Sales Interest Income 70,800 13,000 4,360 18,000 28,000 $129,000 81,800 186,000 $ 69,000 53,160 86,000 1,600 72,000 42,000 140,000 112,000 238,000 155,000 4,360 46,656 Income from Tarp Co Total $952,816 $952,816 $463,760 $463,760 Required a. Prepare the journal entry or entries for 20X4 on Mega's books related to its investment in Tarp Company stock. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 2 Record the dividends from Temple b. Prepare the journal entry or entries for 20X4 on Mega's books related to its investment in Tarp Company bonds. (If no entry is required for a transactionlevent, select" No journal entry required" in the View transaction list Journal entry worksheet Record the entry for the interest income on the bond investment. Note: Enter debits before credits. Debit Event General Journal Credit Record entry Clear entry View general journal c. Prepare the journal entry or entries for 20X4 on Tarp's books related to its bonds payable. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet d. Prepare the consolidation entries needed to complete a consolidated worksheet for 20X4. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) view transaction list Consolidation Worksheet Entries 2 Record the basic consolidation entry. Note: Enter debits before credits. Event Accounts Debit Credit Record entry Clear entry view consolidation entries e. Prepare a three-part consolidated worksheet for 20X4. (Values in the first two columns (the "parent" and "subsidiary" balances) that are to be deducted should be indicated with a minus sign, while all values in the "Consolidation Entries" columns should be entered as positive values. For accounts where multiple adjusting entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet.)
