Par Corporation holds 60 percent of Short Publishing Company's voting shares. Par issued $550,000 of 10 percent bonds with a 10-year maturity on January 1, 20X2, at 94. On January 1, 20X8, Short purchased $110,000 of the Par bonds for $116,000. Partial trial balances for the two companies on December 31, 20X8, are as follows:

Note: Assume using straight-line amortization of bond discount or premium.

Par

CorporationShort

Publishing CompanyInvestment in Short Publishing Company Stock$138,000Investment in Par Corporation Bonds$115,500Bonds Payable550,000Discount on Bonds Payable18,000Interest Expense50,000Interest Income9,100Interest Payable20,000Interest Receivable5,500

Prepare the worksheet consolidation entry or entries needed on December 31, 20X8, to remove the effects of the intercorporate bond ownership in preparing consolidated financial statements.

a) Record the entry to eliminate the effects of the intercompany ownership in bonds for 20X8

b) Record the entry to eliminate the intercompany interest receivables/payables for 20X8.