Bond sale directly to an affiliate: When intercompany sale of bonds takes place between affiliates, all effects of intercompany indebtedness must be eliminated for the purpose of consolidated financial statements. As a company cannot report an investment in its own bonds or bond liability to itself. Thus when the consolidated entity is viewed as a single company all amounts related to intercompany indebtedness are eliminated. To explain : The effect of eliminating intercompany interest income and expense on consolidated net income when loss on bond has been reported in a prior year.

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Chapter 8, Problem 8.8Q

To determine

Bond sale directly to an affiliate: When intercompany sale of bonds takes place between affiliates, all effects of intercompany indebtedness must be eliminated for the purpose of consolidated financial statements. As a company cannot report an investment in its own bonds or bond liability to itself. Thus when the consolidated entity is viewed as a single company all amounts related to intercompany indebtedness are eliminated.

To explain : The effect of eliminating intercompany interest income and expense on consolidated net income when loss on bond has been reported in a prior year.

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Answer 2

Question

Chapter 8, Problem 8.8Q

To determine

Bond sale directly to an affiliate: When intercompany sale of bonds takes place between affiliates, all effects of intercompany indebtedness must be eliminated for the purpose of consolidated financial statements. As a company cannot report an investment in its own bonds or bond liability to itself. Thus when the consolidated entity is viewed as a single company all amounts related to intercompany indebtedness are eliminated.

To explain : The effect of eliminating intercompany interest income and expense on consolidated net income when loss on bond has been reported in a prior year.

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Answer 3

Question

Chapter 8, Problem 8.8Q

To determine

Bond sale directly to an affiliate: When intercompany sale of bonds takes place between affiliates, all effects of intercompany indebtedness must be eliminated for the purpose of consolidated financial statements. As a company cannot report an investment in its own bonds or bond liability to itself. Thus when the consolidated entity is viewed as a single company all amounts related to intercompany indebtedness are eliminated.

To explain : The effect of eliminating intercompany interest income and expense on consolidated net income when loss on bond has been reported in a prior year.

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Answer 4

Question

Chapter 8, Problem 8.8Q

To determine

Bond sale directly to an affiliate: When intercompany sale of bonds takes place between affiliates, all effects of intercompany indebtedness must be eliminated for the purpose of consolidated financial statements. As a company cannot report an investment in its own bonds or bond liability to itself. Thus when the consolidated entity is viewed as a single company all amounts related to intercompany indebtedness are eliminated.

To explain : The effect of eliminating intercompany interest income and expense on consolidated net income when loss on bond has been reported in a prior year.

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Answer 5

Chapter 8, Problem 8.8Q

To determine

Bond sale directly to an affiliate: When intercompany sale of bonds takes place between affiliates, all effects of intercompany indebtedness must be eliminated for the purpose of consolidated financial statements. As a company cannot report an investment in its own bonds or bond liability to itself. Thus when the consolidated entity is viewed as a single company all amounts related to intercompany indebtedness are eliminated.

To explain : The effect of eliminating intercompany interest income and expense on consolidated net income when loss on bond has been reported in a prior year.

Answer 6

Chapter 8, Problem 8.8Q

To determine

Bond sale directly to an affiliate: When intercompany sale of bonds takes place between affiliates, all effects of intercompany indebtedness must be eliminated for the purpose of consolidated financial statements. As a company cannot report an investment in its own bonds or bond liability to itself. Thus when the consolidated entity is viewed as a single company all amounts related to intercompany indebtedness are eliminated.

To explain : The effect of eliminating intercompany interest income and expense on consolidated net income when loss on bond has been reported in a prior year.

Answer 7

Chapter 8, Problem 8.8Q

To determine

Bond sale directly to an affiliate: When intercompany sale of bonds takes place between affiliates, all effects of intercompany indebtedness must be eliminated for the purpose of consolidated financial statements. As a company cannot report an investment in its own bonds or bond liability to itself. Thus when the consolidated entity is viewed as a single company all amounts related to intercompany indebtedness are eliminated.

To explain : The effect of eliminating intercompany interest income and expense on consolidated net income when loss on bond has been reported in a prior year.

Answer 8

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Answer 11

Ch. 8 - Prob. 8.1Q Ch. 8 - What is meant by a constructive bond retirement in...Ch. 8 - Prob. 8.3Q Ch. 8 - Prob. 8.4Q Ch. 8 - When a parent company sells land to a subsidiary...Ch. 8 - Prob. 8.7Q Ch. 8 - Prob. 8.8Q Ch. 8 - Prob. 8.9Q Ch. 8 - Prob. 8.10Q Ch. 8 - Prob. 8.11Q

Solution Summary: The author explains the effect of eliminating intercompany indebtedness on consolidated net income when loss on bond has been reported in a prior year and when two income statements are eliminated.

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