Please complete the amounts below for the Journal entry...

Able Company issued $660,000 of 8 percent first mortgage bonds on January 1, 20X1, at 103. The bonds mature in 20 years and pay interest semiannually on January 1 and July 1. Prime Corporation purchased $440,000 of Ables bonds from the original purchaser on December 31, 20X5, for $435,000. Prime owns 60 percent of Ables voting common stock.

Required:

a.

Prepare the worksheet consolidation entry or entries needed to remove the effects of the intercorporate bond ownership in preparing consolidated financial statements for 20X5. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your market rate of interest to 3 decimals. For example, .0547523 should be rounded to 5.475%.)

Event

Accounts

Debit

Credit

1

Bonds payable

Premium on bonds payable

Investment in Able Company bonds

Gain on bond retirement

2

Interest payable

Interest receivable

b.

Prepare the worksheet consolidation entry or entries needed to remove the effects of the intercorporate bond ownership in preparing consolidated financial statements for 20X6. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your market rate of interest to 3 decimals. For example, .0547523 should be rounded to 5.475%.)

Event

	Accounts	Debit	Credit
1	Bonds payable
	Premium on bonds payable
	Interest income
	Investment in Able Company bonds
	Interest expense
	Investment in Able Company
	NCI in NA of Able Company
2	Interest payable
	Interest receivable