On January 1, 20X5, Pond Corporation purchased 75 percent of Skate Companys stock at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 25 percent of Skates book value. The balance sheets for Pond and Skate at January 1, 20X8, and December 31, 20X8, and income statements for 20X8 were reported as follows:

	20X8 Balance Sheets
	Pond Corporation								Skate Company
	January 1				December 31				January 1				December 31
Assets
Cash	$	66,600			$	62,100			$	14,000			$	56,000
Accounts Receivable		141,000				187,000				75,000				80,000
Interest & Other Receivables		50,000				55,000				15,000				17,000
Inventory		108,000				148,000				59,000				59,000
Land		67,000				67,000				28,000				28,000
Buildings & Equipment		403,000				403,000				245,000				245,000
Accumulated Depreciation		(134,000	)			(169,000	)			(57,000	)			(81,000	)
Investment in Skate Company:
Stock		133,800				150,750
Bonds		37,200				36,800
Investment in Tin Co. Bonds		131,000				130,000
Total Assets	$	1,003,600			$	1,070,650			$	379,000			$	404,000
Liabilities & Equities
Accounts Payable	$	196,100			$	124,650			$	105,000			$	60,500
Interest & Other Payables		39,000				44,000				7,000				12,000
Bonds Payable		286,000				286,000				86,000				86,000
Bond Discount										(5,000	)			(4,500	)
Common Stock		132,000				132,000				24,000				24,000
Additional Paid-In Capital		137,000				137,000				13,000				13,000
Retained Earnings		213,500				347,000				149,000				213,000
Total Liabilities & Equities	$	1,003,600			$	1,070,650			$	379,000			$	404,000

	20X8 Income Statements
	Pond Corporation										Skate Company
Sales						$	470,000								$	270,000
Income from Skate Co.							57,900
Interest Income							19,500
Total Revenue						$	547,400								$	270,000
Cost of Goods Sold		$	285,000								$	129,000
Other Operating Expenses			45,000									35,000
Depreciation Expense			30,000									19,000
Interest Expense			19,000									5,500
Miscellaneous Expenses		$	10,900			$	389,900				$	8,500			$	197,000
Net Income						$	157,500								$	73,000

Additional Information

1. Pond sold a building to Skate for $85,000 on December 31, 20X7. Pond had purchased the building for $145,000 and was depreciating it on a straight-line basis over 25 years. At the time of sale, Pond reported accumulated depreciation of $87,000 and a remaining life of 10 years. Assume Pond uses the fully adjusted equity method.
2. On July 1, 20X6, Skate sold land that it had purchased for $24,000 to Pond for $37,000. Pond is planning to build a new warehouse on the property prior to the end of 20X9.
3. Skate issued $86,000, par value 10-year bonds with a coupon rate of 10 percent on January 1, 20X5, at $81,000. On December 31, 20X7, Pond purchased $34,400 par value of Skates bonds for $37,200. Both companies amortize bond premiums and discounts on a straight-line basis. Interest payments are made on July 1 and January 1.
4. Pond and Skate paid dividends of $24,000 and $9,000, respectively, in 20X8. JE Needed Record the basic consolidation entry.B

• Record the entry to eliminate the gain on the building and to correct asset's basis.C

• Record the adjustment to depreciation expense.D

• Record the entry to remove the land gain.E

• Record the bond consolidation entry.F

• Record the entry to eliminate intercompany receivable and payable due to bond interest.