Popcorn Corporation owns 90% of the outstanding voting common stock of Salty Corporation.On January 1,2005,Salty issued $1,000,000 face amount of 12%,$1,000 bonds payable at 119.20.The bonds pay interest on January 1 and July 1 of each year and mature on January 1,2013.On July 2,2010,Popcorn purchased all of the outstanding bonds at a price of 107.50.Both companies use straight-line amortization.
Required:
1.Prepare the journal entries for July 1,2010 through December 31,2010 for Popcorn Corporation.
2..Prepare the journal entries for July 1,2010 through December 31,2010 for Salty Corporation.
3.Prepare the elimination entries necessary on the consolidating working papers for the year ended December 31,2010.

Question

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The Answer of Popcorn Corporation owns 90% of the outstanding voting common stock of Salty Corporation.On January 1,2005,Salty issued $1,000,000 face amount of 12%,$1,000 bonds payable at 119.20.The bonds pay interest on January 1 and July 1 of each year and mature on January 1,2013.On July 2,2010,Popcorn purchased all of the outstanding bonds at a price of 107.50.Both companies use straight-line amortization.
Required:
1.Prepare the journal entries for July 1,2010 through December 31,2010 for Popcorn Corporation.
2..Prepare the journal entries for July 1,2010 through December 31,2010 for Salty Corporation.
3.Prepare the elimination entries necessary on the consolidating working papers for the year ended December 31,2010.

Popcorn Corporation Owns 90% of the Outstanding Voting Common Stock