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

question 15

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, 2010, 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, 2012, 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, 2013?

---

Definitions:

Physics

The natural science that studies matter, its motion and behavior through space and time, and the related entities of energy and force.

Emergency Services

Critical public services that provide rapid assistance in situations of immediate danger or urgent need, such as police, fire brigade, and ambulance services.

Paramedics

Healthcare professionals who provide advanced emergency medical care and transportation for critically ill or injured patients.

Business Deal

An agreement between parties in the business sector, typically involving the exchange of goods, services, or information.