On January 1, 20X1, Phaser Corporation issued to the public $1,000,000 face amount of 9%, 10-year bonds maturing December 31,2X10, for $1,100,000 (at a premium with a yield of 8 percent). The premium is amortized using the interest method and interest is paid on December 31 of each year.

On January 1, 20X2, Sedd Company, the 70% owned subsidiary of Phaser, acquired in the open market all of the Phaser bonds for $990,000 (at a discount with a yield of 10 percent). The discount is amortized using the interest method.

Compute the interest expense on the Phaser bonds payable for years 20X1 and 20X2.

Compute the interest revenue for Sedd for for 20X2.

Prepare the elimination entry needed at December 31, 20X2.