Soren Corporation Is an 80% Owned Subsidiary of Passia Company

question 12

Multiple Choice

Soren Corporation is an 80% owned subsidiary of Passia Company. Soren purchased bonds of Passia Company for $103,000. Passia Company reported the bond liability on the date of purchase at $100,000 less unamortized discount of $5,000. Assuming that the constructive gain or loss is material, the consolidated income statement should report an:

• A) ordinary loss of $8,000.
• B) ordinary gain of $8,000.
• C) extraordinary loss of $8,000 adjusted for income tax effects.
• D) extraordinary gain of $8,000 adjusted for income tax effects.

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24-hour Recall

A dietary assessment method where individuals report all the foods and beverages they consumed in the previous 24 hours.

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