Several years ago brant, inc., sold $960,000 in bonds to the public. annual cash interest of 7 percent ($67,200) was to be paid on this debt. the bonds were issued at a discount to yield 10 percent. at the beginning of 2013, zack corporation (a wholly owned subsidiary of brant) purchased $120,000 of these bonds on the open market for $141,000, a price based on an effective interest rate of 5 percent. the bond liability had a book value on that date of $820,000. assume brant uses the equity method to account internally for its investment in zack.

a. & b.
what consolidation entry would be required for these bonds on december 31, 2013 and december 31, 2015? (if no entry is required for a transaction/event, select "no journal entry required" in the first account field.)

Variable rate cd’s = $90 treasury bills = $150 discount loans = $20 treasury notes = $100 fixed rate cds = $160 money market deposit accts. = $140 savings deposits = $90 fed funds borrowing = $40 variable rate mortgage loans $140 demand deposits = $40 primary reserves = $50 fixed rate loans = $210 fed funds lending = $50 equity capital = $120 a. develop a balance sheet from the above data. be sure to divide your balance sheet into rate-sensitive assets and liabilities as we did in class and in the examples. b. perform a standard gap analysis and a duration analysis using the above data if you have a 1.15% decrease in interest rates and an average duration of assets of 5.4 years and an average duration of liabilities of 3.8 years. c. indicate if this bank will remain solvent after the valuation changes. if so, indicate the new level of equity capital after the valuation changes. if not, indicate the amount of the shortage in equity capital.