Please Prepare Excel

Parent Co$.$ owns $75\%$ of Sub Co$.$ and uses the cost method to account for its investment. The

following are summarized income statements for the year ended December $31,$ Year $7.$

Additional Information

On July $1,$ Year $7,$ Parent purchased all of the outstanding bonds of Sub for $$381,250.$ On

that date, Sub had $$400,000$ of $10\%$ bonds payable outstanding, which mature in five years.

The bond discount on the books of Sub on July $1,$ Year $7,$ amounted to $$20,000.$ Interest is

payable January $1$ and July $1.$ Any gains $($losses$)$ are to be allocated to each company. Both

companies use the straight$-$line method to account for bonds.

Sub Co$.$ did not declare or pay dividends in Year $7.$

Required:

Prepare a consolidated income statement for Year $7$ using a $40\%$ tax rate. Show all your workings.