ntercompany debt that must be eliminated from consolidated financial statements may result from: a. one member of a consolidated group selling its bonds directly to another member of the group. b. one member of a consolidated group advancing funds to another member of the group so that the member may retire bonds it had issued to outside parties. c. one member of a consolidated group purchasing bonds from outside parties as an investment that had been issued to outside parities by another member of the group. d. all of the above.

ntercompany debt that must be eliminated from consolidated financial statements may result from: a. one member of a consolidated group selling its bonds directly to another member of the group. b. one member of a consolidated group advancing funds to another member of the group so that the member may retire bonds it had issued to outside parties. c. one member of a consolidated group purchasing bonds from outside parties as an investment that had been issued to outside parities by another member of the group. d. all of the above.

Cornerstones of Financial Accounting

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Publisher:Jay Rich, Jeff Jones

Chapter9: Long-term Liabilities

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Problem 101.2C: Debtholders receive note contracts, one for each note, that describe the payments promised by the...

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7. Intercompany debt that must be eliminated from consolidated financial statements may result from: a. one member of a consolidated group selling its bonds directly to another member of the b. one member of a consolidated group purchasing bonds from outside parties as an investment that had been issued to outside parities by another member of the group. group. c. all of the above. santong you mostalni ar 1911c 160 d. one member of a consolidated group advancing funds to another member of the group so that the member may retire bonds it had issued to outside parties.
A parent company acquires from a third party bonds that had been issued originally by one of its subsidiaries. What accounting problems are created by this purchase?
A parent business purchases bonds on the open market that had previously been issued by a subsidiary of the parent firm. Consequently, the price paid by the parent is less than the amount of bonds that are currently recorded on the subsid- iary's books. When it comes to reporting the difference between the price paid and the carrying amount of the bonds, how should the parent report it on its consolidated financial statements?
) On an income distribution schedule, any gain or loss resulting from intercompany bonds is charged to a. the issuer of the bonds. b. the purchaser of the bonds. c. allocation between the issuer and the purchaser. d. none of the above
When a company acquires an affiliated company’s debt instruments from a third party, how is the gain or loss on extinguishment of the debt calculated? When should this balance be recognized?
A member of a consolidated group may sell its bond directly to another member of the group. This would result in an intercompany debt that must be eliminated from the consolidated statements. Another avenue is for the parent to purchase the subsidiary bonds from outside parties and hold the bonds as an investment. Using the above information discuss the ramifications the purchase of intercompany bonds would have when consolidating under the two options described above.
If share warrants were exercised by the holder of compound financial instrument, liability would be derecognize a debit to the equity account related to share warrants will be done a credit to the equity account related to share warrants will be done share warrants outstanding account will not be affected. The proceeds from a bond issued with conversion feature should be accounted for entirely as bonds payable entirely as shareholders’ equity partially as unearned revenue and partially as bonds payable partially as shareholders’ equity and partially as bonds payable
A parent company buys bonds on the open market that had been previously issued by its subsidiary. The price paid by the parent is less than the carrying amount of the bonds on the subsidiary’s records. How should the parent report the difference between the price paid and the carrying amount of the bonds on its consolidated financial statements? As a loss on retirement of the bonds. As a gain on retirement of the bonds. As an increase to interest expense over the remaining life of the bonds. Because the bonds now represent intra-entity debt, the difference is not reported.
T or F - Zero-interest bonds sell at a significant discount that provides an investor with a total interest payoff at maturity. -Bond issuance costs must be reported separately as deferred charges and charged to expense over the life of the bond issue. -According to PAS 37, restructuring is a program that is planned and controlled by management, and materially changes either the scope of a business undertaken by an entity; or the manner in which that business is conducted -Provisions are presented in the statement of financial position as part of the line item “Trade and other payables.”
5. A gain or loss may arise from which of the following? a. The initial recognition of the debt and equity components of a compound financial instrument. b. The purchase, sale, issue or cancellation of the entity's own equity instruments. c. The conversion of bonds into the entity's own equity instrument. d. The settlement of a liability at an amount below or above its carrying amount. NOT FOR SALE! StuDOcucom respective authors.
4. Boss Co. purchased bonds at a discount in the open market as an investment. The bonds will be held in order to collect their contractual cash flows. Boss should account for these bonds at a. Cost. c. Fair value through OCI. d. Lower of cost or market. b. Amortized cost. 5. According to PFRS 9, on initial recognition, the entity has the option of designating financial assets to be measured at FVPL
5. A gain or loss may arise from which of the following? a. The initial recognition of the debt and equity components of a compound financial instrument. b. The purchase, sale, issue or cancellation of the entity's own equity instruments. c. The conversion of bonds into the entity's own equity instrument. d. The settlement of a liability at an amount below or avo its carrying amount.

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a.	one member of a consolidated group selling its bonds directly to another member of the group.
b.	one member of a consolidated group advancing funds to another member of the group so that the member may retire bonds it had issued to outside parties.
c.	one member of a consolidated group purchasing bonds from outside parties as an investment that had been issued to outside parities by another member of the group.
d.	all of the above.