When a Parent company acquires from an unaffiliated third party a Subsidiarys debt instruments (or vice versa),
Fantastic news! We've Found the answer you've been seeking!
Question:
When a Parent company acquires from an unaffiliated third party a Subsidiary’s debt instruments (or vice versa), the consolidated financial statements should recognize gain or loss on constructive retirement of the debt. Thereafter, the [I bond] consolidation entry is required to correct the beginning balance of the Equity investment account. Why is this adjustment required? Why does the amount of this gradually decline over the remaining life of the bonds?
Expert Answer:
Answer rating: 100% (QA)
Since the debt instrument was acquired for the subsidiary by the parent company via an unaffiliated ... View the full answer
Posted Date:
Students also viewed these accounting questions
-
A parent company acquires from a third party bonds that had been issued originally by one of its subsidiaries. What accounting problems are created by this purchase?
-
When does the distributing corporation recognize gain or loss on the distribution of stock or securities of a controlled corporation to its shareholders?
-
When a parent company buys more than 50 percent but less than 100 percent of a subsidiary's shares, a certain type of equity is created. What is it called, and how do most companies report it?
-
Is the PS assessment a valid predictor of performance as a store manager? Would you recommend the PS be used in the future to select sales people for promotion to store manager?
-
The lifetimes of televisions produced by the Hishobi Company are normally distributed with a mean of 75 months and a standard deviation of 8 months. If the manufacturer wants to have to replace only...
-
Consider a thin-walled tube of 10-mm diameter and 2-m length. Water enters the tube from a large reservoir at in = 0.2 kg/s and Tm,i = 47C. (a) If the tube surface is maintained at a uniform...
-
Explain the acronyms AIM, SETS, MTF and HFT.
-
LIFO Inventory Advantages Jane Yoakam, president of Estefan Co., recently read an article that claimed that at least 100 of the countrys largest 500 companies were either adopting or considering...
-
What was Exponent's capital employed in the most recent fiscal year (2022)?
-
The Albertville City Council decided to pool the investments of its General Fund with Albertville Schools and Richwood Township in an investment pool to be managed by the city. Each of the pool...
-
Suppose these selected condensed data are taken from recent balance sheets of Bob Evans Farms (in thousands). 2020 2019 $14,842 $7,864 22,940 21,718 33,619 29,952 19,984 20,322 Total current assets...
-
Two test charges are located in the x-y plane. If q = -4.250 nC and is located at x = 0.00 m, y = 1.1200 m, and the second test charge has magnitude of q2 = 3.000 nC and is located at x2 = 1.400 m,...
-
Sophmore Industries uses a weighted - average process - costing system. All materials are added at the beginning of the process while conversion costs are incurred evenly throughout production. The...
-
Your brother needs a $ 5 , 0 0 0 loan to go to college. Because of his poverty, he will pay nothing for the next four years. Five years from today he will begin paying you $ 2 , 5 0 0 a year for the...
-
Prepare journal entries for the following independent transactions. Required 1 . Swift Canoe Limited sold office equipment for $ 1 0 , 0 0 0 cash. The original cost of the equipment was $ 1 5 , 0 0 0...
-
You are the owner of a video game company preparing to launch a highly anticipated gaming console this year. However, you are faced with a decision to either release the console as planned or delay...
-
5. The price p (in dollars) and demand x for wireless headphones are related by x = 7.000 -0.1p. The current price of $110 is decreasing at a rate $7 per week. Find the associated revenue function...
-
DEPARTMENT DATA EMPLOYEE DATA EmployeeNumber FirstName Mary Rosalie Richard George Alan 3 4 5 7 8 9 855555ES 12 13 14 15 16 17 Create the database tables in SQL or ACCESS: 18 19 20 PROJECT DATA Ken...
-
Folk Landscaping is evaluating an offer to purchase Bruce Lawn Care, its main competitor, for \($250,000.00.\) An accountant has projected that the purchase will increase Folks annual net cash flow...
-
How much do we need to invest each year to have \($100,000.00\) in a college fund when our child turns 18 years old? New parents often seek similar advice from their financial advisors to establish...
-
Forester Company is evaluating the purchase of equipment from two vendors. Differences in the technology and labor requirements to operate the equipment of each vendor affect the projected net cash...
Study smarter with the SolutionInn App