Punk Corporation purchased 90 percent of Soul Company's voting common shares on January 1, 20X2, at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 10 percent of the book value of Soul Company. Punk also purchased $87,000 of 6 percent, five-year bonds directly from Soul on January 1, 20X2, for $91,000. The bonds pay interest annually on December 31. The trial balances of the companies as of December 31, 20X4, are as follows: Soul Company Debit Credit $ 38,600 92,000 247,000 Punk Corporation Debit Credit $ 24,000 174,000 414,000 118,602 88,600 72,000 17,000 15, 220 27,000 $133,000 87,900 187,000 Item Cash & Receivables Inventory Buildings & Equipment Investment in Soul Company Stock Investment in Soul Company Bonds Cost of Goods Sold Depreciation Expense Interest Expense Dividends Declared Accumulated Depreciation Current Payables Bonds Payable Bond Premium Common Stock Retained Earnings Sales Interest Income Income from Soul Company Stock Total 65,800 12,000 4,420 17,000 $ 73,000 84,220 87,000 1,600 61,000 31,000 139,000 101,000 232,000 154,000 4,420 51,102 $950,422 $950,422 $476,820 $476,820 Required: a. Prepare the journal entry or entries for 20X4 on Punk's books related to its investment in Soul Company stock. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list X > Record the dividends from Soul. A B Record the equity-method income. b. Prepare the journal entry or entries for 2084 on Punk's books related to its investment in Soul Company bonds. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the entry for the interest income on the bond investment. Note: Enter debits before credits. General Journal Debit Credit Event 1 Record entry Clear entry View general journal c. Prepare the journal entry or entries for 20X4 on Soul'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.) 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 d. Prepare the consolidation entries needed to complete a consolidated worksheet for 20X4. (If no entry is required for a transaction/event, select "No journal entry required in the first account field.) view transaction list X A Record the basic consolidation entry. > B Record the entry to eliminate the intercompany bond hol Credit Note: = journal entry has been entered Record entry Clear entry view consolidation entries e. Prepare a three-part consolidated worksheet for 20X4. (Values in the first two columns (the "parent" and "subsidiary" balances) that are to be deducted should be indicated with a minus sign, while all values in the "Consolidation Entries" columns should be entered as positive values. For accounts where multiple adjusting entries are required, combine all deblt entries Into one amount and enter this amount in the deblt column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet.) PUNK CORPORATION AND SUBSIDIARY Consolidated Financial Statement Worksheet December 31, 20X4 Consolidation Entries Soul Punk Corp CR Company DR Consolidated Income Statement Sales Interest Income 0 0 0 0 0 Less: COGS Less: Depreciation Expense Less: Interest Expenses Income from Soul Company Stock Consolidated Net Income NCI in Net Income Controlling Interest in Net Income Statement of Retained Earnings Beginning Balance Net Income Less: Dividends Declared Ending Balance Balance Sheet 0 0 0 0 0 0 0 0 0 0 Assets Cash and Accounts Receivable Inventory Buildings & Equipment Less: Accumulated Depreciation Investment in Soul Company Bonds Investment in Soul Company Stock Total Assets Liabilities & Equity Current Payable Bonds Payable Bond Premium Common Stock Retained Earnings NCI in NA of Soul Company 0