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

question 31

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 consolidation entry would be recorded in connection with these intra-entity bonds on December 31, 2015?

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Definitions:

Childhood Conflicts

Internal or external disputes experienced during childhood that can significantly influence personality development and psychological health.

Personality

The assortment of characteristics that shape a person's unique disposition.

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Operations of the mind that are involved in thinking, reasoning, perception, and judgment.

Unconscious Forces

Psychological influences of which individuals are not fully aware, but that affect thoughts, feelings, and behaviors.