Par Corporation holds 60 percent of Short Publishing Company’s voting shares. Par issued $500,000 of 10...

Par Corporation holds 60 percent of Short Publishing Company’s voting shares. Par issued $500,000 of 10 percent (paid semiannually) bonds with a 10-year maturity on January 1, 20X2, at 90. On January 1, 20X8, Short purchased $100,000 of the Par bonds for $106,000. Partial trial balances for the two companies on December 31, 20X8, are as follows:

	Par Corporation		Short Publishing Company
Investment in Short Publishing Company Stock	$	141,000
Investment in Par Corporation Bonds			$	104,676
Bonds Payable		500,000
Discount on Bonds Payable		21,289
Interest Expense		55,626
Interest Income				8,676
Interest Payable		25,000
Interest Receivable				5,000

Required:
Prepare the worksheet consolidation entry or entries needed on December 31, 20X8, to remove the effects of the intercorporate bond ownership in preparing consolidated financial statements. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to nearest whole dollar.)

A

Record the entry to eliminate the effects of the intercompany ownership in bonds for 20X8.
B

Record the entry to eliminate the intercompany interest receivables/payables for 20X8.

Expert Solution

A

Record the entry to eliminate the effects of the intercompany ownership in bonds for 20X8.

B

Record the entry to eliminate the intercompany interest receivables/payables for 20X8.

Refer to the below image for more detailed solution with calculations.

ekkarill92 answered 1 year ago

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