Popcorn Corporation Owns 90% of the Outstanding Voting Common Stock

question 10

Essay

Popcorn Corporation owns 90% of the outstanding voting common stock of Salty Corporation.On January 1,2009,Salty issued $1,000,000 face amount of 12%,$1,000 bonds payable at 119.20.The bonds pay interest on January 1 and July 1 of each year and mature on January 1,2017.On July 2,2014,Popcorn purchased all of the outstanding bonds at a price of $107.50.Both companies use straight-line amortization.
Required:
1.Prepare the journal entries for July 1,2014 through December 31,2014 for Popcorn Corporation.
2.Prepare the journal entries for July 1,2014 through December 31,2014 for Salty Corporation.
3.Prepare the elimination entries necessary on the consolidating working papers for the year ended December 31,2014.

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Definitions:

Brainwaves

Electrical impulses in the brain, measured by EEG, that reflect the brain's activity levels and states of arousal, including delta, theta, alpha, beta, and gamma waves.

REM Sleep

A phase of sleep characterized by rapid eye movements, low muscle tone, and vivid dreams, during which the brain is highly active.

Task-unrelated Thoughts

Thoughts that occur while engaged in a task, which are not directly related to the task at hand, often serving as distractions.

Mind Wandering

A cognitive process where attention shifts away from a primary task to unrelated thoughts or fantasies.