Sabu Is a 65%-Owned Subsidiary of Peerless

question 18

Essay

Sabu is a 65%-owned subsidiary of Peerless.On January 1,2010,Sabu issued $1,000,000 of $1,000 face amount 8% bonds at $980 per bond.The bonds have interest payments on December 31 of each year and mature on January 1,2015.On January 1,2011,Peerless purchased all 1,000 bonds on the open market for $1,010 per bond.Straight-line amortization is used by both companies.
Required: With respect to the bonds,use General Journal format to:
1.Record the journal entries on Sabu's books made from 2010 to 2015.
2.Record the journal entries on Peerless' books made from 2010 to 2015.
3.Record the elimination entries for the consolidation working papers for 2010 through 2015.

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Definitions:

Aztec Empire

A Mesoamerican empire that flourished in central Mexico in the 14th, 15th, and early 16th centuries, known for its sophisticated civilization, architectural achievements, and complex social structure before falling to Spanish conquerors.

Hernán Cortés

A Spanish Conquistador known for his expedition that led to the fall of the Aztec Empire and the establishment of Mexico City on its ruins.

Bartolome De Las Casas

A 16th-century Spanish historian and Dominican friar who became the first known advocate for the rights of indigenous people in the Americas, and opposed the abuses of the Spanish encomienda system.

Native Americans

The indigenous peoples of the United States, including a vast array of tribes, cultures, and languages that inhabited the land prior to European colonization.