When a constrictive retirement takes place, the consolidated income statement for the year shows the profit or loss on retirement, but not reported in the consolidated balance sheet, if the company purchases the bond of a related company from an unrelated party at a price equal to the value reported, the elimination entries required to be prepared in the consolidated financial statement. The consolidation entries needed at December 31, 20X8.

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Chapter 8, Problem 8.9E

To determine

Introduction: When a constrictive retirement takes place, the consolidated income statement for the year shows the profit or loss on retirement, but not reported in the consolidated balance sheet, if the company purchases the bond of a related company from an unrelated party at a price equal to the value reported, the elimination entries required to be prepared in the consolidated financial statement.

The consolidation entries needed at December 31, 20X8.

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