Beluga Ltd. is a wholly owned subsidiary of Orcas Ltd. On January 1, 19X8, Beluga issued $200,000 of 5%, 10 year bonds payable for $240,000. The interest is paid annually, on December 31. On January 1, 20X5, Orcas Ltd. purchased $50,000 face value of the Beluga bonds for $41,000.

Required

a. Give the eliminating entries relating to the bonds as they would appear on the consolidated worksheet at December 31, 20X5.

b. Assume instead that Beluga is 75% owned by Orcas. Give the eliminating entries for the bonds at December 31, 20X5, using:

i) the agency method; and

ii) the par-value method.