Packed Corporation owns 60 percent of Snowball Enterprises’ stock. On January 1, 20X1, Packed sold $1.07 million par value, 10 percent (paid semiannually), 20-year, first mortgage bonds to Kling Corporation at 98. On January 1, 20X8, Snowball purchased $321,000 par value of the Packed bonds directly from Kling for $317,820.
Required:
Prepare the consolidation entry needed at December 31, 20X8, to remove the effects of the intercorporate bond ownership in preparing consolidated financial statements.