King Company acquired 80,000 of the 100,000 outstanding common shares of Jack Company on January 1, 2020. Queen Company holds 15% of Jack Companys bonds payable, debt with a maturity date of June 30, 2028. The other 85% of Jack Companys bonds payable are owned by various companies and individuals (not King Co.). King Companys fiscal year-end is January 31, and Jack Companys fiscal year- end is December 31.

How should King Company recognize Queen Companys investment in the bonds of Jack Company in the Consolidated financial statements? King should:

a. Include Queen Companys interest in Jack Companys debt as Noncontrolling Interest in the consolidated balance sheet.

b. Exclude Queen Companys interest in Jack Companys debt as Noncontrolling Interest in the consolidated balance sheet because this does not represent ownership rights in the subsidiary.

PLEASE INCLUDE WHICH SECTION OF FASB YOU FOUND THE SUPPORTING PROOF IN... EX. FASB XX-XX-XX-XX IN NOTE XX