Fargus Corporation Owned 51% of the Voting Common Stock of Sanatee

question 70

Essay

Fargus Corporation owned 51% of the voting common stock of Sanatee, Inc. The parent's interest was acquired several years ago on the date that the subsidiary was formed. Consequently, no goodwill or other allocation was recorded in connection with the acquisition price. On January 1, 2020, Sanatee sold $1,400,000 in ten-year bonds to the public at 108. The bonds pay a 10% interest rate every December 31. Fargus acquired 40% of these bonds on January 1, 2022, for 95% of the face value. Both companies utilized the straight-line method of amortization.What consolidation entry would be recorded in connection with these intra-entity bonds on December 31, 2024?

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Definitions:

Alcoholics

Individuals who suffer from alcoholism, a chronic disease characterized by uncontrolled drinking and preoccupation with alcohol.

Active Ingredient

The component in a product, especially in pharmaceuticals, that is responsible for its therapeutic effect.

Marijuana

A psychoactive drug derived from the Cannabis plant, used primarily for medical or recreational purposes.

THC

Tetrahydrocannabinol, the psychoactive compound found in marijuana that is responsible for its mind-altering effects.