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

question 63

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?

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Definitions:

Pathology Present

The state in which a disease or abnormal condition is actively manifesting in a body or sample.

Digestive

Pertains to the biological system in organisms responsible for breaking down food into nutrients and waste.

Esophagus

The muscular tube that moves food from the throat to the stomach.

Sphincter

A ring-like muscle that controls the passage of substances through an opening in the body, such as the anus or esophagus.