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

question 94

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, 2014?

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Definitions:

Presynaptic Membrane

The membrane of a nerve cell terminal that is proximal to the synaptic cleft and releases neurotransmitters in response to an action potential.

Action Potential

A rapid, temporary change in the electrical charge across a cell membrane, allowing nerve cells to transmit signals.

Gated Channels

Protein channels in cell membranes that open or close in response to specific stimuli, regulating the flow of ions or molecules.

Depolarization

The process in which the electrical charge of a cell membrane becomes less negative, leading to the activation of electrical activities like nerve impulses.