To Eliminate Intercompany Bonds and Interest Expense of Consolidated Companies

question 42

Multiple Choice

To eliminate intercompany bonds and interest expense of consolidated companies, Company P (Parent) and Company S (Subsidiary) which of the following is correct?

• A)​Debit Interest Expense and credit Interest Income and credit Bonds Payable and debit Investment in Company S
• B)​Credit Interest Expense and debit Interest Income and credit Bonds Payable and debit Investment in Company S
• C)​Debit Interest Income and credit Interest Expense and debit any related Loss on Bond Retirement, if any, and debit Bonds Payable and credit Investment in Company S Bonds
• D)​Debit Subsidiary Income and credit Investment in Company S Stock

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Definitions:

Performance Standards

Benchmarks or specific criteria set to evaluate the effectiveness or success of an individual's or organization's work.

Job Analysis

The process of studying and collecting information about the duties, responsibilities, and tasks of a specific job.

Organizational Strategy

The comprehensive plan developed by an organization to achieve its long-term goals and success.

Performance Evaluation

The systematic process of assessing and rating an employee's work performance and productivity over a certain period.