On January 1, Year 5 , Ali Corp, sold $200,000 par value, 10 year first mortgage bonds to Fredericton Ltd. and $150,000 of these bonds to a noncontrolling shareholder. The bonds, which bear a nominal interest rate of 12 percent, pay interest annually on December 31. The entry to record interest income by Fredericton Ltd. on December 31. Year 7. was as follows: Fredericton owns 65 pereent of the voting stock of Ali. It uses the straight-tine method to account for its investment in bonds. Required (a) What was the original purchase price of the bonds by Fredericton and the noncontrolling interest? Assume that they paid the same priee per each thousand dollars of bonds. (b) What are the balances in Fredericton's and the noncontrolling interest's investment in Ali bonds account on December 31 , Year 7? (c) What amounts should be reported on the Year 7 consolidated statements with respect to these bonds? Chase Corporation owns 60 percent of Moncton Corporation's voting shares. On January 1, Year 2, Chase Corporation sold $300,000 par value, 6 percent first mortgage bonds to Moncton for $312,000. The bonds mature in 10 years and pay interest annu on January 1. The straight-line method is used when amortizing the premium on the bonds. Required (a) Prepare the journal entries for Year 2 for Moncton related to its ownership of Chase's bonds. (b) Prepare the journal entries for Year 2 for Chase related to the bonds. (c) What amounts should be reported on the Year 2 consolidated statements with respect to these bonds? Peggy Company owns 75% of Sally Ine. and uses the cost method to account for its investment. The following data were taken from the Year 4 income statements of the two companies: On January 1, Year 2. Sally sold equipment to Peggy at a gain of \$15,000. Peggy has been depreciating this equipment over a fiveyear period. Sally did not pay any dividends in Year 4. Use income tax allocation at a rate of 40%. Required (a) Calculate consolidated proft attributable to Peggy's shareholders for Year 4. (b) Prepare a consolidated income statement for Year 4. (c) Calculate the deferred income tax asset that would appear on the Year 4 consolidated statement of financial position