Question

Farley Corporation owns 70 percent of Snowball Enterprises' stock. On January 1, 20X1, Farley sold $1,000,000 par value, 7 percent (paid semiannually), 20-year, first mortgage bonds to Kling Corporation at 97. On January 1, 20X8, Snowball purchased $300,000 par value of the Farley bonds directly from Kling for $296,880.

Required
Prepare the elimination entry needed at December 31, 20X8, to remove the effects of the intercorporate bond ownership in preparing consolidated financial statements.



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  • CreatedMay 23, 2014
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