Question $1$

$1\mathrm{.}5$ pts

Which of the following are ways for the parent company to lend money to its subsidiary?

Buying the subsidiary's bonds payable from outsider bondholders.

All of these are methods for the parent to lend money to its subsidiary.

Buying newly issued bonds from the subsidiary directly.

Lending money to the subsidiary to reacquire its bonds payable from outsider bondholders.

Question $2$

$1\mathrm{.}5$ pts

If the subsidiary issues bonds to outsiders and the parent later buys $60\%$ of these bonds from outsiders, only $60\%$ of the interest expense on the subsidiary's bonds will be eliminated when consolidating the financial statements.

True

False