Padma Corporation owns 70% of the outstanding stock of Somega Company. On January 1, 2012, Somega issued $2,000,000 in 6% bonds that matured on January 1, 2022. At the time of issuance, the bonds were sold at a premium of $250,000. At January 1, 2013, Padma purchased half of the bonds for $910,000, and constructively retired the debt. Annual interest is paid on December 31. Straight-line amortization is used by both companies.
Required:
Complete the table below with respect to the account balances that Padma, Somega and the consolidated entity would report on their respective financial statements.

Question

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The Answer of Padma Corporation owns 70% of the outstanding stock of Somega Company. On January 1, 2012, Somega issued $2,000,000 in 6% bonds that matured on January 1, 2022. At the time of issuance, the bonds were sold at a premium of $250,000. At January 1, 2013, Padma purchased half of the bonds for $910,000, and constructively retired the debt. Annual interest is paid on December 31. Straight-line amortization is used by both companies.
Required:
Complete the table below with respect to the account balances that Padma, Somega and the consolidated entity would report on their respective financial statements.

Padma Corporation Owns 70% of the Outstanding Stock of Somega