On January 1, 2016, Pope Company Acquired 100% of the Common

Essay

On January 1, 2016, Pope Company acquired 100% of the common stock of Siegel Company for $300,000.On this date Siegel had total owners' equity of $250,000.Any excess of cost over book value is attributable to goodwill.Pope accounts for its Investment in Siegel using the simple equity method.
​
On January 1, 2016, Siegel Company sold to outside investors $300,000 par value of 10-year, 10% bonds.The price received was equal to par.The bonds pay interest semi-annually on July 1 and January 1.
​
During 2016, market interest rates on bonds similar to those issued by Siegel decreased to 8%.As a result, the market value of the bonds increased.On December 31, 2016, Pope purchased $150,000 par value of Siegel's bonds, paying $163,000.Pope still holds the bonds on December 31, 2019 and has amortized the premium, using the straight-line method.
​
Required:
​
Prepare the eliminating entries pertaining to the intercompany purchase of bonds outstanding for the year ended December 31, 2019.