On January 01, 2020, Pebble Company purchased a controlling interest in Rock Company for $402,000. On this date, Rock had total owners' equity of $440,000. Any excess of cost over book value is due to goodwill. Pebble accounts for its investment in Rock using the simple equity method. On January 1, 2022, Pebble held merchandise acquired from Rock for $50,000. During 2022, Rock sold merchandise to Pebble for $120,000, of which Pebble holds $30,000 on December 31, 2022. Rock's gross profit on sales is 40%. On December 31, 2022, Pebble still owes Rock $5,000 for merchandise. On December 31, 2020, Pebble sold $100,000 par value of 11%, 10-year bonds which resulted in an effective interest rate of 10%. The bonds pay interest semi-annually on June 30 and December 31. Both companies use the Effective Interest method to amortize any premium / discount on the bonds. On December 31, 2021, Rock purchased $50,000 par value of the parents bonds, paying a price equal to par. The bonds are still held on December 31, 2022. On December 31, 2022, Pebble sold equipment with a cost of $50,000 and accumulated depreciation of $30,000 to Rock for $40,000. Rock will use the equipment beginning in 2023. Pebble and Rock had the following trial balances on December 31, 2022: Balances Pebble Rock Inventory, December 31 120,000 60,000 Other Current Assets 399,620 325,000 Investment in Rock Company 550,000 Investment in Pebble Bonds 50,000 Land 140,000 100,000 Buildings & Equipment 325,000 440,000 Accumulated Depreciation (120,000) (130,000) Current Liabilities (160,000) (80,000) Bonds Payable, 10% (100,000) Premium on Bonds Payable (5,420) Other Long-Term Liabilities (200,000) (140,000) Common Stock - Pebble Co. (200,000) Other Paid-In Capital - Pebble Co. (100,000) Retained Earnings - Pebble Co. (489,200) Common Stock - Rock Co. (100,000) Other Paid-In Capital - Rock Co. (200,000) 2 Balances Pebble Rock Retained Earnings - Rock Co. (250,000) Net Sales (590,000) (520,000) Cost of Goods Sold 355,000 310,000 Operating Expenses 114,426 115,500 Interest Income (5,500) Interest Expense 10,574 Subsidiary Income (80,000) Gain on Sale of Equipment (20,000) Dividends Declared - Pebble Co. 50,000 Dividends Declared - Rock Co. 25,000 Total 0 0 Required: (1) Calculate the percentage interest of Rock Companys voting common stock that was acquired by Pebble Company on the date of acquisition. (2) Prepare the Eliminating and Adjusting Entries