Question

Rock is an 80% owned subsidiary of Gibberbird. On January 1,2012, Rock issued $450,00 of $1,000 face amount 6%bonds at par. Thebonds have interest payments on Jan 1 and July 1 of each year andmature January 1, 2016. On July 1, 2013 before interest payment,Gibberbird purchased all 450 bonds on the open market for $1,030per bond. 1.Record 2013 journal entries for Jul1 to Dec 31 on Rocksbooks. 2. Record the 2013 journal entries from Jul 1 to Dec 31 onGibberbird's books. 3. Record the elimination entries for theconsolidation working papers at December 31, 2013.