Tate Corporation issued bonds with a par value of $500,000 to its parent company on July 1, 20X4, for $460,000. The bonds have an 8-percent nominal interest rate, pay interest on January 1 and July 1, and mature 20 years from the issue date. Tate Corporation's common stock is 97 percent-owned by its parent. Straight-line amortization is used by both companies.

Required

a. Present all elimination entries related to the bonds that would be required to prepare consolidated financial statements for the year 20X4.

b. If Tate Corporation retires the bonds at par on January 1, 20X9, present all elimination entries related to the bonds that would be needed to prepare consolidated financial statements for the year 20X9.