School Perfume Company issued $300,000 of 10 percent bonds on January 1, 20X2, at 110. The bonds mature 10 years from issue and have semiannual interest payments on January 1 and July 1. Parsons Corporation owns 80 percent of School Perfume stock. On January 1, 20X4, Parsons purchased $100,000 par value of School Perfume bonds in the securities markets for $106,200. Partial trial balances for the two companies on December 31, 20X4, are as follows:

Required

Prepare the necessary worksheet consolidation entries as of December 31, 20X4, to remove the effects of the intercorporate bond ownership.

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Investment in School Perfume Company Bonds Interest Income Interest Receivable Bonds Payable Bond Premium Interest Expense Interest Payable Parsons Corporation $105,640 9,440 5,000 School Perfume Company $300,000 23,447 27,632 15,000