A Subsidiary Issues Bonds

question 45

Essay

A subsidiary issues bonds.The parent can then acquire the bonds either directly from the subsidiary or from a nonaffiliate that had originally acquired the subsidiary's bonds.
Required:
a)Discuss the parent's accounting as it relates to the preparation of consolidated financial statements,for their acquisition of the bonds:
1.from the nonaffiliate.
2.directly from the subsidiary.
b)Why does it matter who the bonds are acquired from?

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Definitions:

Gap Junctions

Specialized intercellular connections that allow for direct communication between cells through the exchange of ions and small molecules.

Cardiac Muscle

A type of involuntary striated muscle found exclusively in the heart, responsible for heart contractions.

Left Coronary Artery

The artery that supplies blood to the left side of the heart, branching into the circumflex and left anterior descending arteries.

Interventricular Septum

The stout wall separating the ventricles of the heart beneath the aortic valve.