The accounting problems encountered in consolidated intra-entity debt transactions when the debt is acquired by an affiliate from an outside party include all of the following except: Changes in the investment, debt, interest revenue, and interest expense accounts occur constantly because of the amortization process. Subsequent interest revenue/expense must be removed although these balances fail to agree in amount. The gain or loss on the retirement of the debt must be recognized by the business combination in the year the debt is acquired, even though this balance does not appear on the financial records of either company. Both the investment and debt accounts have to be eliminated now and for each future consolidated financial statement despite containing differing balances. A gain or loss must be recognized by both parent and subsidiary companies.