P4-32 Balance Sheet Consolidation On January 2, 20X8. Primary Corporation acquired 100 percent of Street Company's outstanding common stock. In exchange for Street's stock, Primary issued bonds payable with a par and fair value of $650,000 directly to the selling stockholders of Street. The two companies continued to operate as separate entities subsequent to combination Primary Corporation Book Value Fair Value $ 12,000 $ 12,000 41,000 39,000 (2,000) 86,000 89,000 55,000 200,000 960,000 650,000 (411,000) Cash Receivables Allowance for Bad Debts Inventory Land Buildings & Equipment Accumulated Depreciation Patent Total Assets Current Payables Bonds Payable Common Stock Additional Paid-In Capital Retained Earnings Total Liabilities & Equity Street Company Book Value Fair Value $ 9,000 $ 9,000 31,000 30,000 (1,000) 68,000 72,000 50,000 70,000 670,000 500,000 (220,000) 40,000 $607,000 $721,000 $ 29,000 $ 29,000 100,000 90,000 200,000 130,000 148,000 $607,000 $990,000 $ 38,000 210,000 $741,000 $ 38,000 200,000 300,000 100,000 103,000 $741,000 Immediately prior to the combination, the book values and fair values of the companies' assets and liabilities were as follows: At the date of combination, Street owed Primary $6,000 plus accrued interest of $500 on a short-term note. Both companies have properly recorded these amounts. Required a. Record the business combination on the books of Primary Corporation. b. Present in general journal form all elimination entries needed in a worksheet to prepare a consolidated balance sheet immediately following the business combination on January 2, 20X8. c. Prepare and complete a consolidated balance sheet worksheet as of January 2, 20X8, immedi- ately following the business combination. d. Present a consolidated balance sheet for Primary and its subsidiary as of January 2, 20X8