On January 1, 2013, Riley Corp

question 99

Multiple Choice

On January 1, 2013, Riley Corp. acquired some of the outstanding bonds of one of its subsidiaries. The bonds had a carrying value of $421,620, and Riley paid $401,937 for them. How should you account for the difference between the carrying value and the purchase price in the consolidated financial statements for 2013?

• A) The difference is added to the carrying value of the debt.
• B) The difference is deducted from the carrying value of the debt.
• C) The difference is treated as a loss from the extinguishment of the debt.
• D) The difference is treated as a gain from the extinguishment of the debt.
• E) The difference does not influence the consolidated financial statements.

---

Definitions:

Timeliness

The quality of being done within a desirable time frame or deadline, often crucial for decision-making or reporting.

Purchases Journal

A record of all credit purchases made by a business, used to track and manage inventory acquisition.

Beverage Supplies

Items and ingredients used in the preparation and sale of drinks, often accounted for in businesses that serve food and drink.

Food Supplies

Items necessary for the production and provision of food services, including raw ingredients, pre-packaged commodities, and other essential food items.