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

question 28

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, 2012, 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, 2014, for 95% of the face value. Both companies utilized the straight-line method of amortization.
What balances would need to be considered in order to prepare the consolidation entry in connection with these intra-entity bonds at December 31, 2014, the end of the first year of the intra-entity investment? Prepare schedules to show numerical answers for balances that would be needed for the entry.

Recognize the importance of heart location for medical procedures.

Know the normal values of stroke volume under resting conditions.

Identify the structural features of cardiac muscle tissue contributing to its function.

Understand the role of the sarcoplasmic reticulum in cardiac muscle cells.

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Definitions:

Capital Account

The capital account in accounting represents where all transactions involving the purchase and sale of capital assets are recorded, often reflecting the net worth of a business.

Liquidating

The process of converting assets into cash, often referring to the sale of assets during the winding down or closure of a business.

Noncash Assets

Assets that are not in the form of cash or easily convertible into cash, such as real estate, equipment, and patents.

Capital Deficiency

A situation where a company's liabilities exceed its assets, indicating financial distress.