Company S Is a 100%-Owned Subsidiary of Company P

question 20

Multiple Choice

Company S is a 100%-owned subsidiary of Company P.Company S has outstanding 6%, 10-year bonds sold to yield 7%.On January 1 of the current year, Company P purchased all of the Company S outstanding bonds at a price that reflected the current 9% effective interest rate.How should this event be reflected in the current year's consolidated statements?

• A)​The bonds remain in the balance sheet and are accounted for at a 7% effective rate.
• B)​The bonds remain in the balance sheet and are accounted for at a 9% effective rate.
• C)​Retirement of the bonds at a gain as of the purchase date.
• D)​Retirement of the bonds at a loss as of the purchase date.

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Definitions:

Completing a Task

The act of finishing a specific job or assignment, often involving a set of actions or steps tailored towards accomplishing an objective.

Manhood

Manhood is a term associated with the qualities, attributes, and roles deemed by society to be characteristic of adult men, encompassing both biological and social aspects.

Misogyny

A deep-seated prejudice or disdain against women, manifesting through discrimination, hostility, and violence towards women.

Homophobia

Prejudice, fear, or discrimination against homosexual individuals and homosexuality.