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:

Disclosure

The act of making new or confidential information known, which can relate to personal, financial, or legal matters.

Bad Manners

Inappropriate, rude, or impolite behaviors in social settings.

Talking Back

Responding defiantly or argumentatively, often considered disrespectful, especially in contexts of authority.

Teenagers

Refers to individuals typically between the ages of 13 and 19, a developmental stage characterized by physical, emotional, and social changes.