Sabu is a 65%-owned subsidiary of Peerless.On January 1,2012,Sabu issued $1,000,000 of $1,000 face amount 8% bonds at $980 per bond.The bonds have interest payments on December 31 of each year and mature on January 1,2017.On January 1,2013,Peerless purchased all 1,000 bonds on the open market for $1,010 per bond.Straight-line amortization is used by both companies.
Required: With respect to the bonds,use General Journal format to:
1.Record the journal entries on Sabu's books made from 2012 to 2017.
2.Record the journal entries on Peerless' books made from 2012 to 2017.
3.Record the elimination entries for the consolidation working papers for 2012 through 2017.
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