Porter Company purchased 60 percent ownership of Service Corporation on January 1, 20X1, at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 40 percent of Service's book value. On January 1, 20X1, Porter sold $75,000 par value, 8 percent, five-year bonds directly to Service for $77,000 and the market interest rate was 7 percent. The bonds pay interest annually on December 31. Porter uses the fully adjusted equity method in accounting for its ownership of Service. On December 31, 20X2, the trial balances of the two companies are as follows: Note: Assume using straight-line amortization of bond discount or premium. Item Cash & Accounts Receivable Inventory Buildings & Equipment Investment in Service Corporation Stock Investment in Porter Company Bonds Cost of Goods Sold Depreciation Expense Interest Expense Dividends Declared Accumulated Depreciation Accounts Payable Bonds Payable Bond Premium Common Stock Retained Earnings Sales Interest Income Income from Service Corp. Total Porter Company Service Corporation Debit Credit Debit Credit $ 80,200 $ 62,000 127,000 87,000 510,000 311,000 111,600 76,200 87,800 48,000 21,000 11,000 5,600 13,600 38,000 8,000 $166,000 $ 66,000 86,400 97,200 75,000 187,000 1,200 189,000 89,000 219,000 39,000 205,000 133,000 5,600 39,600 $981,200 $981,200 $616,800 $616,800 Required: a. Prepare the journal entry or entries for 20x2 on Porter's books related to its investment in Service. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations. Round your final answers to nearest whole dollar.) View transaction list Journal entry worksheet A B > Record the dividends from Service. Note: Enter debits before credits. Event General Journal Debit Credit 1 Record entry Clear entry View general journal b. Prepare the iournal entry or entries for 20x2 on Porter's books related to its bonds pavable. (If no entry is required for a View transaction list Journal entry worksheet Record the equity-method income. Note: Enter debits before credits. Event General Journal Debit Credit 2 Record entry Clear entry View general journal b. Prepare the iournal entry or entries for 20x2 on Porter's books related to its bonds pavable. (If no entry is required for a b. Prepare the journal entry or entries for 20x2 on Porter's books related to its bonds payable. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations. Round your final answers to nearest whole dollar.) View transaction list Journal entry worksheet Record the entry for interest expense on bond investment. Note: Enter debits before credits. Event General Journal Debit Credit 1 Record entry Clear entry View general journal c. Prepare the journal entry or entries for 20x2 on Service's books related to its investment in Porter's bonds. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations. Round your final answers to nearest whole dollar.) View transaction list Journal entry worksheet A > Record the entry for the interest income on the bond investment. Note: Enter debits before credits. Event General Journal Debit Credit 1 Record entry Clear entry View general journal d. Prepare the consolidation entries needed to complete a consolidated worksheet for 20x2. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations. Round your final answers to nearest whole dollar.) view transaction list Consolidation Worksheet Entries . B > Record the basic consolidation entry. Note: Enter debits before credits. Event Accounts Debit Credit 1 Beginning Balance Net Income Less: Dividends Declared Ending Balance Balance Sheet Assets Cash and Accounts Receivable Inventory Buildings & Equipment Less: Accumulated Depreciation Investment in Porter Co. Bonds Investment in Service Corporation Stock Total Assets Liabilities & Equity Accounts Payable Bonds Payable Bond Premium Common Stock Retained Earnings NCI in NA of Service Co. Total Liabilities & Equity