Parent owns 100% of subsidiary. Subsidiary has bonds payable to third parties of $5,500,000., plus an unamortized premium with a credit balance of $500,000. In 2022, parent purchases all outstanding bonds from third parties for $6,400,000. What result is reported in the 2022 consolidated financial statements. a. Consolidated loss on “retirement” of bonds $400,000 b. No gain or loss is reported in the consolidated totals on this intercompany transaction. c. Consolidated loss on “retirement” of bonds of $1,400,000 d. Consolidated gain on “retirement” of bonds of $1,100,000 e. Consolidated gain on “retirement” of bonds of $400,000
Parent owns 100% of subsidiary. Subsidiary has bonds payable to third parties of $5,500,000., plus an unamortized premium with a credit balance of $500,000. In 2022, parent purchases all outstanding bonds from third parties for $6,400,000. What result is reported in the 2022 consolidated financial statements. a. Consolidated loss on “retirement” of bonds $400,000 b. No gain or loss is reported in the consolidated totals on this intercompany transaction. c. Consolidated loss on “retirement” of bonds of $1,400,000 d. Consolidated gain on “retirement” of bonds of $1,100,000 e. Consolidated gain on “retirement” of bonds of $400,000
Chapter20: Corporations: Distributions In Complete Liquidation And An Overview Of Reorganizations
Section: Chapter Questions
Problem 33P
Related questions
Question
Parent owns 100% of subsidiary. Subsidiary has bonds payable to third parties of $5,500,000., plus an unamortized premium with a credit balance of $500,000. In 2022, parent purchases all outstanding bonds from third parties for $6,400,000. What result is reported in the 2022 consolidated financial statements.
a. |
Consolidated loss on “retirement” of bonds $400,000 |
|
b. |
No gain or loss is reported in the consolidated totals on this intercompany transaction. |
|
c. |
Consolidated loss on “retirement” of bonds of $1,400,000 |
|
d. |
Consolidated gain on “retirement” of bonds of $1,100,000 |
|
e. |
Consolidated gain on “retirement” of bonds of $400,000 |
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you