On January 1, 20X5, Pond Corporation purchased 75 percent of Skate Company's stock at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 25 percent of Skate's 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: 2018 Balance Sheets Pond Corporation January 1 December 31 Skate Company January 1 December 31 Assets Cash Accounts Receivable Interest Other Receivables $ 66,600 141,000 50,000 $ 62,100 187,000 $ 14,000 75,000 $ 56,000 80,000 55,000 15,000 17,000 Inventory 108,000 148,000 59,000 59,000 Land 67,000 67,000 28,000 28,000 Building 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. Bonda 131,000 $1,003,600 130,000 $1,070,650 $379,000 $404,000 Total Assets Liabilities & Equities Accounts Payable Interest & Other Payables Bands Payable Band Discount Common Stock Additional Paid-In Capital Retained Earnings $ 196,100 $ 124,650 $105,000 39,000 44,000 7,000 286,000 286,000 86,000 $ 60,500 12,000 86,000 (5,000) (4,500) 132,000 132,000 24,000 24,000 137,000 137,000 13,000 13,000 213,500 347,000 Total Liabilities & Equities $1,003,600 $1,070,650 149,000 $379,000 213,000 $404,000 2008 Income Statements Pond Corporation Skate Company Sales Income from Skate Co. $470,000 57,900 $270,000 Interest Income Total Revenue 19,500 $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 Miscellaneous Expenses 19,000 10,900 5,500 Net Income $389,900 $157,500 8,500 $197,000 $ 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 Skate's 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. Required: a. Prepare all consolidation entries needed at December 31, 20X8, rates are required for a transaction/event, select "No journal entry required" in the first account field.) (If no entry is view transaction list Record the basic consolidation entry. Record the entry to eliminate the gain on the building and to correct asset's basis. Record the adjustment to depreciation expense. Record the entry to remove the land gain. Record the bond consolidation entry. Credit Record the entry to eliminate intercompany receivable and payable due to bond interest. JE A-F only