On January 1, 20X8, Parent Company Purchased 90% of the Common

Essay

On January 1, 20X8, Parent Company purchased 90% of the common stock of Subsidiary Company for $450,000. On this date, Subsidiary had common stock, other paid in capital, and retained earnings of $20,000, $130,000, and $200,000, respectively. Any excess of cost over book value is due to goodwill. Parent accounts for the Investment in Subsidiary using the cost method.
On January 1, 20X8, Subsidiary sold $100,000 par value of 6%, ten-year bonds for $97,000. The bonds pay interest semi-annually on January 1 and July 1 of each year.
On January 1, 20X9, Parent repurchased all of Subsidiary's bonds for $96,400. The bonds are still held on December 31, 20X9.
Both companies have correctly recorded all entries relative to bonds and interest, using straight-line amortization for premium or discount.
Required:
Complete the Figure 5-6 worksheet for consolidated financial statements for the year ended of December 31, 20X9. Round all computations to the nearest dollar.