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

question 33

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, 2022?

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Definitions:

Megasporangium

A plant structure that produces megaspores, which develop into female gametophytes in seed plants and certain ferns.

Ovules

Small structures within the ovary of seed plants that develop into seeds upon fertilization.

Over-The-Counter

Refers to drugs or medications that can be purchased without a prescription, available directly to consumers.

Ginkgo Tree

A unique species of tree, Ginkgo biloba, known for its fan-shaped leaves and status as a living fossil, having no close living relatives.