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Big owns $80\%$ of Little

Assume that at aqusition therr was no differential

On $\frac{1}{1}\frac{?}{22}$ Little issues $$100,000$ of $10\%,10$ year bonds at $103.$

The bonds are dated $\frac{1}{1}\frac{?}{22},$ and pay interest each $\frac{12}{31}$

On $1/1/24$ Big buys the bonds on the open market at $102$

Worksheets for $2024$ and $2025$ are provided below. Provide appropriate elimination entries and complete the works

Both firms use straight$-$line amortization, and Big uses the full equity method to account for their investment in Little

$\backslash$table$[[2024,$Big,Little,dr$,$cr$,$Consolidated$],[$Sales$,290,000,245,000,,,],[$Interest expense,,$9,700,,,],[$Interest revenue,$9,750,,,,],[$Other expenses,$276,000,230,000,,,],[$Gain$/$loss on bond retirement,,,,,$],[$Investment income,$4,520,,,,],[$Net income,,,,,$],[$Income to NC Interest,,,,,$],[$Income to controlling interest,,,,,$],[,,,,,],[$Beginning R$/$E$,200,000,150,000,,,],[$Add: Income,,,,,$],[$Less: Dividends,,$10,000,,,],[$Ending R$/$E$,,,,,],[,,,,,],[$Current assets,$20,000,50,000,,,],[$Investment in Little,$148,520,,,,],[$Investment in bonds,$101,750,,,,],[$Other Non$-$current assets,$138,000,267,400,,,],[,,,,,],[$Current liabilties,$60,000,30,000,,,],[$Bonds payable,,$100,000,,,],[$Premium on bonds,,$2,100,,,],[$Common stock,$120,000,40,000,,,],[$Retained earnings,,,,,$],[$NC Interest,,,,,$],[,,,,,]]$

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