Question
Wagner, a holder of a P1,000,000 Palmer, Inc. bond, collected the interest due on March 31, 1992, and then sold the bond to Seal, Inc.
Wagner, a holder of a P1,000,000 Palmer, Inc. bond, collected the interest due on March 31, 1992, and then sold the bond to Seal, Inc. for P975,000. On that date, Palmer, a 75% owner of Seal, had a P1,075,000 carrying amount for this bond. What was the effect of Seal's purchase of Palmer's bond on the retained earnings and non-controlling interest amounts reported in Palmer's March 31, 1992, consolidated balance sheet? Retained earnings Non-controlling interest 1 point a. P100,000 increase P0 b. P75,000 increase P25,000 increase c. P0 P25,000 increase d. P0 P100,000 increase
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