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

question 64

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, 2014?

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Definitions:

IgE Antibodies

Antibodies produced by the immune system that play a key role in allergic reactions.

Allergy

An immune system reaction to foreign substances (allergens) that are usually harmless to most people, leading to various symptoms.

Phagocytosis

A cellular process where cells engulf and digest particles or other cells, a crucial part of the immune response.

Activated T Cells

Immune cells that have been stimulated by an antigen to provide an immune response against infections and diseases.