Asked by samuel morales on Jun 07, 2024
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A subsidiary has purchased some bonds from its parent company. Under the par-value method, the non-controlling interest is allocated its share of the difference between ________.
A) the bond's market value and face value
B) the bond's face value and its carrying value on the subsidiary's books
C) the bond's market value and its carrying value on the subsidiary's books
D) the bond's par value and carrying value
Par-Value Method
An accounting method used for recording the issuance of stock, where the stock is recorded at its face or par value, and any amount received over par value is credited to an additional paid-in capital account.
Non-Controlling Interest
The equity in a subsidiary not attributable directly or indirectly to the parent company, often shown separately in the consolidated financial statements.
Carrying Value
The amount at which an asset or liability is recognized in the balance sheet, considering depreciation, amortization, or impairment.
- Apply the par-value and agency methods to allocate gains or losses on intercompany bond transactions.
- Comprehend how non-controlling interests are affected by intercompany bond transactions and the allocation of gains or losses.
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Learning Objectives
- Apply the par-value and agency methods to allocate gains or losses on intercompany bond transactions.
- Comprehend how non-controlling interests are affected by intercompany bond transactions and the allocation of gains or losses.
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