Parent owns 100 of Sub On the open market parent bought all bonds of the Sub for $800,000 on January 1, 2020 The fiscal year end for both Parent and Sub is December 31 The par value of these bonds on ledger for Sub is $800,000 Interest is paid annually December 31, at 5 On the books of the Sub there is an un amortized discount of $60,000 The bonds mature in 5 years What would be the pre tax gain or loss to the consolidated entity on the intercompany retirement of the bonds What amount of interest expense would need to be eliminated on the consolidated income statement What amount of interest revenue would need to be eliminated on the consolidated income statement

Question

Parent owns 100  of Sub  On the open market parent bought all bonds of the Sub for $800,000 on January 1, 2020  The fiscal year end for both Parent and Sub is December 31  The par value of these bonds on ledger for Sub is $800,000  Interest is paid annually December 31, at 5   On the books of the Sub there is an un amortized discount of $60,000  The bonds mature in 5 years  What would be the pre tax gain or loss to the consolidated entity on the intercompany retirement of the bonds  What amount of interest expense would need to be eliminated on the consolidated income statement  What amount of interest revenue would need to be eliminated on the consolidated income statement

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Parent owns 100% of Sub. On the open market parent bought all bonds of the Sub for $800,000 on January 1, 2020. The fiscal year

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