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 $80,000 par value, 8 percent, five-year bonds directly to Service when 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: Porter Company Debit Credit $ 81,480 120,000 500,000 101,772 Service Corporation Debit Credit $ 38,720 65,000 300,000 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 Pond Premium 99,800 25,000 5,790 40,000 82,100 61,000 15, eee 14, eee 10, eee $175,000 $ 75,000 68,800 80,000 2,100 41,200 2ee, eee Accounts Payable Bonds Payable Bond Premium Common Stock Retained Earnings Sales Interest Income Income from Service Corp. 68,800 80,000 2,100 200,000 230,068 200,000 17,874 $973,842 Total $973,842 $585,820 Required: a. Prepare the journal entry or entries for 20x2 on Porter's books related to its investment in Service. (If no transaction/event, select "No journal entry required" in the first account field. Do not round your interme your final answers to nearest whole dollar.) Answer is not complete. 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.) No Event General Journal Debit Credit 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 re for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calcula Round your final answers to nearest whole dollar.) Answer is not complete. No Event General Journal Debit Credit A 1 Cash 6,400 Interest income Investment in Porter Company bonds 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.) Answer is not complete. No Event Accounts Debit Credit A 1 100,000 49,830 Common stock Retained earnings Income from Service Corporation NCI in Nl of Service Corporation 0 X 0 x Dividends declared 0 X 0 X Investment in Service Corporation stock NCI in NA of Service Corporation B 2 Bonds payable 0 X SUIVU Wuly Income from Service Corporation NCI in NI of Service Corporation Dividends declared 0 0 X Investment in Service Corporation stock 0 X NCI in NA of Service Corporation 0 X B 2 Bonds payable 0 X 0 X Bond premium Interest income Investment in Porter Company bonds 0 X 0 X Interest expense 0 x e. Prepare a three-part consolidated worksheet for 20x2. (Values in the first two columns (the "parent" and "subsidiary" bala that are to be deducted should be indicated with a minus sign, while all values in the "Consolidation Entries" columns shou entered as positive values. For accounts where multiple adjusting entries are required, combine all debit entries into one ar and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter amount in the credit column of the worksheet.) X Answer is not complete. PORTER COMPANY AND SUBSIDIARY Consolidated Financial Statement Worksheet December 31, 20X2 Consolidation Entries Porter Co. Service Co. DR CR Consolidated Income Statement Sales 0 X 0X 0 X Interest Income 0 0 x 0 X TO PORTER COMPANY AND SUBSIDIARY Consolidated Financial Statement Worksheet December 31, 20X2 Consolidation Entries Porter Co. Service Co. DR CR Consolidated Income Statement Sales 0 X 0 X 0 X Interest Income 0 X 0 X Less: COGS 0 X 0 x 0 % 0 X 0 X 0 X Less: Depreciation Expense Less: Interest Expenses O O O O O O O O 0 x 0 X Income from Service Co. 0 X 0 0 X Consolidated Net Income 0 0 0 0 NCI in Net Income 0 > 0 0 X 0 0 0 0 0 Controlling Interest in Net Income Statement of Retained Farninas Statement of Retained Earnings Beginning Balance 0 x 0 x 0 X Net Income Less: Dividends Declared 0X 0 x 0 X Ending Balance 0 0 0 0 0 Balance Sheet Assets Cash and Accounts Receivable 0 X 0 X 0 X 0 X 0 x 0 X 0 X 0 X Inventory Buildings & Equipment Less: Accumulated Depreciation Investment in Porter Co. Bonds 0 X 0 X 0 X 0 X 0 0 X 0 X Investment in Service Corporation Stock 0 X 0 0 x Total Assets 0 0 0 0 0 Liabilities & Equity Accounts Pavable exa 0 x Buildings & Equipment Less: Accumulated Depreciation 0 x 0 x 0 x 0 x 0 x 0 x Investment in Porter Co. Bonds 0 O o ooo 0 x 0 x Investment in Service Corporation Stock 0 x 0 x 0 0 0 0 Total Assets Liabilities & Equity Accounts Payable Bonds Payable Bond Premium 0 x 0 X 0 x 0 x 0 x 0 x 0 x 0 0 Common Stock 0 x 0 X 0 Retained Earnings NCI in NA of Service Co. 0 0 X o o Total Liabilities & Equity 0 0 0 0