Question: Company P purchased 100 000 of subsidiary Company S s bonds for
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 face value 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.
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