Suspect Company Issued $1,170,000 of 8 percent first mortgage bonds on January 1, 20X1, at 104. The bonds mature in 20 years and pay interest semiannually on January 1 and July 1. Prime Corporation purchased $780,000 of Suspect's bonds from the original purchaser on December 31, 20X5, for $774,000. Prime owns 70 percent of Suspect's voting common stock. Required: a. Prepare the worksheet consolidation entry or entries needed to remove the effects of the intercorporate bond ownership In preparing consolidated financial statements for 20X5. (If no entry is required for a transaction/event, select "No journal entry required" In the first account fleld. Do not round your Intermediate calculations. Round your final answers to nearest whole dollar.) Answer is complete but not entirely correct. No Event A 1 Bonds payable Premium on bonds payable Accounts Investment in Suspect Company bonds Gain on bond retirement B 2 Interest payable Interest receivable Debit Credit 780.000 23,400 774,000 6.000 31.200 31.200 b. Prepare the worksheet consolidation entry or entries needed to remove the effects of the Intercorporate bond ownership In preparing consolidated financial statements for 20X6. (If no entry is required for a transaction/event, select "No journal entry required" in the first account fleld. Do not round your Intermediate calculations. Round your final answers to nearest whole dollar.) No Event A 1 Answer is not complete. Accounts Bonds payable Premium on bonds payable Interest income Investment in Suspect Company B 2 Interest payable Interest receivable Debit Credit 780,000 17.160 23.160 774,000 23,160 23.180 < A B Record the entry to eliminate the effects of the intercompany ownership in bonds for 20X5. Note: Enter debits before credits. Event Accounts 1 Bonds payable Premium on bonds payable Investment in Suspect Company bonds Gain on bond retirement Consolidation Worksheet Entries A B Debit Credit 780.000 23,400 774,000 6.000 Record the entry to eliminate the intercompany interest receivables/payables for 20X5. Note: Enter debits before credits. Event 2. Interest payable Interest receivable Accounts Debit Credit 31,200 31,200 b. Prepare the worksheet consolidation entry or entries needed to remove the effects of the intercorporate bond ownership in preparing consolidated financial statements for 20X6. (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 < Record the entry to eliminate the effects of the intercompany ownership in bonds for 20x6. Notes Enter debits before credits. Event 1 Bonds payable Accounts Debit Credit 780.000 Premium on bands payable Interest income Investment in Suspect Company 17.100 23,100 774,000 view transaction list Consolidation Worksheet Entries B > Record the entry to eliminate the intercompany interest receivables/payables for 20X6. Note: Enter debits before credits. Event Accounts Debit Credit