A Parent company owns an 80% controlling interest in the voting common stock of its Subsidiary. The Subsidiary also has outstanding 10,000 shares of 4% cumulative preferred stock outstanding with par value equal to $1,000,000.

If the parent company owns none of the preferred stock, how should the preferred stock be accounted for in the consolidated financial statements?

a. All of the preferred stock equity account is assigned to the noncontrolling interests.

b. Twenty percent of the preferred stock equity account is assigned to the noncontrolling interests.

c. Eighty percent of the preferred stock equity account is assigned to the noncontrolling interest.

d. Eighty percent of the preferred stock equity account is eliminated against Investment in Subsidiary account on the Parents balance sheet.