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  3. porter company purchased 60 percent ownership of s

Porter Company purchased 60 percent ownership of Service Corporation on January 1, 20X1, at underlying...

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Accounting

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Porter Company purchased 60 percent ownership of Service Corporation on January 1, 20X1, at underlying book value. At that date. the fair value of the noncontrolling interest was equal to 40 percent of Service's book value, On January 1, 20X1, Porter sold $76,000 par value, 8 percent, five-year bonds directly to Service for $78,000 and the market interest rate was 7 percent. The bonds pay interest annually on December 31. Porter uses the fully adjusted equity method in accounting for its ownership of Service. On December 31,202, the trial balances of the two companies are as follows: Note: Assume using straight-line amortization of bond discount or premium. Required: a. Prepare the journal entry or entries for 202 on Porter's books related to its investment in Service. b. Prepare the journal entry or entries for 202 on Porter's bookstelated to its bonds payable. c. Prepare the journal entry or entries for 202 on Service's books related to its investment in Porter's bonds. d. Prepare the consolidation entries needed to complete a consolidated worksheet for 202. e. Prepare a three-part consolidated worksheet for 202

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