Stallion Corporation sold $100,000 par value, 10-year first mortgage bonds to Pony Corporation on January 1, 20X5. The bonds, which
bear a nominal interest rate of 12 percent, pay interest semiannually on January 1 and July 1. The current market interest rate is 11
percent. Pony Corporation owns 65 percent of the voting stock of Stallion Corporation, and consolidated statements are prepared on
December 31, 2007.
Required:
a. What was the original purchase price of the bonds to Pony Corporation?
b. What is the balance in Pony's bond investment account on December 31, 20X77
c. Prepare the worksheet consolidation entry or entries needed to remove the effects of the intercompany ownership of bonds in
preparing consolidated financial statements for 20X7.
Complete this question by entering your answers in the tabs below.
Required A Required B Required C
What was the original purchase price of the bonds to Pony Corporation?
Note: Round your answer to 2 decimal places.
Original purchase price
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