Parent Company owns 60 percent of the voting common stock of the Subsidiary Inc. On January 1, 2019, Subsidiary sold ten-year bonds with face value of $560,000 to the public for $604,000. The bonds pay 10 percent cash every December 31.

On January 1, 2021, Parent Company acquires 100% of these bonds for $532,000. On this date, Subsidiary reported the book value of the bonds payable of $595,840 and the bonds had 8 years to maturity. Parent applies the equity method to internally account for its investment in subsidiary. Both companies use the straight-line method to amortize premium or discount on bonds.

1.) Determine the balance of the following accounts on Parent and Subsidiary's separate books. Show supporting calculations. These items would be used to prepare the consolidation entry for the intra-entity bonds on December 31, 2021.

A.) interest expense on the intra-entity bonds

B.) Balance of the (unamortized) premium on bonds payable account

C.) Interest Income on the intra-entity bonds

D.) Balance of the investment in Bonds Account

2.) Prepare the consolidation entry that would be recorded in connection with these intra-entity bonds on December 31, 2021.