Par Corporation holds 60 percent of Short Publishing Company’s voting shares. Par issued $500,000 of 10 percent (paid semiannually) bonds with a 10-year maturity on January 1, 20X2, at 90. On January 1, 20X8, Short purchased $100,000 of the Par bonds for $106,000. Partial trial balances for the two companies on December 31, 20X8, are as follows:

Required

Prepare the worksheet consolidation entry or entries needed on December 31, 20X8, to remove the effects of the intercorporate bond ownership in preparing consolidated financial statements.

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Investment in Short Publishing Company Stock Investment in Par Corporation Bonds Bonds Payable Discount on Bonds Payable Interest Expense Interest Income Interest Payable Interest Receivable Par Corporation $141,000 500,000 21,289 55,626 25,000 Short Publishing Company $104,676 8,676 5,000