On January 1, 2019, Parent Company purchased 90% of the common stock of Subsidiary Company for $360,000.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 account for the Investment in Subsidiary using the simple equity method.
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On July 1, 2019, Subsidiary sold $100,000 par value of 9%, ten-year bonds for $106,755, which resulted in an effective interest rate of 8%.The bonds pay interest semi-annually on January 1 and July 1 of each year.Subsidiary uses the effective-interest method of amortizing the premium.
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An amortization table for 2019 and 2021 is presented below:
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\begin{array}{cccccc}\text { Date } & \text { Cash Int } & \text { Interest Exp } &\text { Premium Amort } &\text { Premium Bal } &\text { Carrying Value }\\\hline7 / 1 / 19 & & & & 6,755 & 106,755 \\12 / 31 / 19 & 4,500 & 4,270 & 230 & 6,525 & 106,525 \\7 / 1 / 21 & 4,500 & 4,261 & 239 & 6,286 & 106,286 \\12 / 31 / 21 & 4,500 & 4,251 & 249 & 6,037 & 106,037\end{array}

On July 1, 2021, Parent repurchased all of Par's bonds for $94,153, which resulted in an effective interest rate of 10%.The bonds are still held at year end.
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Both companies have correctly recorded all entries relative to bonds and interest.The balance in the Investment in Subsidiary Bonds account is $94,361 at December 31, 2021, and the parent recognized interest income of $4,708 during the period.
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Required:
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Prepare the eliminating entries pertaining to the intercompany purchase of bonds for the year ending December 31, 2021.
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In the Year When One Member of a Consolidated Group

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