Company P purchased $100,000 of subsidiary Company Ss bonds for $96,000 on January 1, 2011, when the bonds had five years to maturity The bonds had been issued at face value and pay interest at 8 annually What will the impact of this transaction be on consolidated net income for the current and fut...

In the current year consolidated net income will include a gain on retirement of bonds of 4000 ...

Company P purchased $100,000 of subsidiary Company Ss bonds for $96,000 on January 1, 2011, when the

Question:

Company P purchased $100,000 of subsidiary Company S’s bonds for $96,000 on January 1, 2011, when the bonds had five years to maturity. The bonds had been issued at and pay interest at 8% annually. What will the impact of this transaction be on consolidated net income for the current and future four years? Assuming a 20% non-controlling interest, how will the NCI be affected in the current and next four years? Quantify your response.
Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...