Prepare the journal entries wood recorded

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Wood Corporation owns 1 percent of Carter Company's voting shares. On January 1, 20X3, Carter sold bonds with a par value of $690,000 at 98. Wood purchased $460,000 par value of the bonds; the remainder was sold to nonaffiliates. The bonds mature in five years and pay an annual interest rate of 8 percent. Interest is paid semiannually on January 1 and July 1.

Required:

A.) What amount of interest expense should be reported in the 20X4 consolidated income statement? (Do not round your intermediate calculations. Round your final answers to nearest whole dollar.)

B.) Prepare the journal entries Wood recorded during 20X4 with regard to its investment in Carter bonds. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your market rate of interest to 3 decimals.)

C.) Prepare all worksheet consolidation entries needed to remove the effects of the intercorporate bond ownership in preparing consolidated financial statements for 20X4. (if no entry is required for a transaction/event, select "No journal entry required" Round your market rate of interest to 3 decimals.

Reference no: EM131773138

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