Question

Package Plus, Inc. has $2,000,000 of 10% bonds outstanding on December 31, 20X8. On January 1, 20X9, WrapIt Corporation, an 80%-owned subsidiary of Package Plus, Inc. purchases a $200,000 part of Package Plus, Inc.’s outstanding bonds in the market for $195,000. The interest accrued at 12/31/X9 is $10,000. Determine the eliminating entries necessary for the 20X9 consolidated financial statements. Describe eliminating entries.