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:

Androgen Insensitivity Syndrome

A condition where a person who is genetically male is resistant to male hormones (androgens), leading to the development of female physical traits but male genetic makeup.

Klinefelter Syndrome

A condition in which a male has one or more extra X chromosomes, causing the development of female secondary sex characteristics.

Congenital Adrenal Hyperplasia

A group of inherited disorders of the adrenal gland whereby individuals born with this condition lack an enzyme needed by the adrenal gland to make the hormones cortisol and aldosterone.

5-alpha Reductase Deficiency

A genetic condition that affects male sexual development before birth and during puberty.