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

question 56

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, 2012?

---

Definitions:

American Medical Association

A professional association and lobbying group for physicians in the United States dedicated to promoting the art and science of medicine and the betterment of public health.

Nonadherence Risk

The likelihood of an individual not following prescribed treatment plans or recommendations, which can compromise overall health outcomes.

Practical Support

The provision of tangible assistance to others, such as help with daily tasks, financial assistance, or the provision of resources or services.

Emotional Support

Assistance provided to individuals through empathy, concern, and encouragement to help manage their emotions.