Nettle Corporation sells the value of its 10-year mortgage bond, up to $ 100,000, to Timberline Corporation on January 1, 20X5. The bonds have a nominal interest rate of 12 percent, payment of interest each semester on January 1 and July 1. The current market interest rate is 11 percent. Timberline owns 65 percent of the voting rights of Nettle Corporation, and a consolidated report was prepared as of December 31, 20X7.

a. What is the actual bond purchase price made by Timberline Corporation? b. What was the balance in the Timberline bond investment account at 31 December 20X7? c. Provide the write-off journal entry worksheet or journal entry necessary to remove the effect of intercompany bond ownership in preparing the consolidated financial statements for 20X7.