Pretzel Corporation owns 60 percent of Stick Corporation’s voting shares. On January 1, 20X2, Pretzel Corporation sold $180,000 par value, 6 percent first mortgage bonds to Stick for $185,000. The bonds mature in 10 years and pay interest semiannually on January 1 and July 1. a. Prepare the journal entries for 20X2 for Stick related to its ownership of Pretzel’s bonds. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations. Round your final answers to nearest whole dollar.)
Record the investment in the bonds of Pretzel Corporation.
Record the semiannual interest income received from the bonds of Pretzel Corporation.
Record the semiannual interest receivable from the bonds of Pretzel Corporation.
b. Prepare the journal entries for 20X2 for Pretzel related to the bonds. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations. Round your final answers to nearest whole dollar.)
Record the investment in Pretzel Corporation bonds by Stick Corporation.
Record the payment of interest and the amortization of the bond premium.
Record the interest payable and the amortization of bond premium.
c. Prepare the worksheet consolidation entries needed on December 31, 20X2, to remove the effects of the intercorporate ownership of bonds. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations. Round your final answers to nearest whole dollar.)
Record the entry to eliminate the intercompany bond holdings.
Record the entry to eliminate intercompany receivable/payable.