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

question 33

Multiple Choice

Company S is a 100%-owned subsidiary of Company P.Company S has outstanding 8%, 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:

Verbal Report

The oral transmission of information from one health care provider to another, often used in shift changes or during patient handoffs.

Electronic Record Entry

The process of entering patient information and medical data into a digital system, contributing to the electronic health record (EHR).

Acuity Rating

A classification system used in healthcare to assess the severity of a patient’s condition and determine the level of care needed.

Community Resources

Various types of support and facilities available within a community that improve the quality of life for its members.