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.
Answer to relevant QuestionsYour friend is a non-controlling interest shareholder in a large company. He knows that the subsidiary company leases most of its assets from the parent company under operating leases. He further believes that the lease ...Cardinal Company is an 80%-owned subsidiary of Dove Corporation. Cardinal Company issued $100,000 of 8%, 10-year bonds for $96,000 on January 1, 2011. Annual interest is paid on January 1. Dove Corporation purchased the ...Since its 100% acquisition of Dreger Corporation stock on December 31, 2012, Jayco Corporation has maintained its investment under the equity method. However, due to Dreger’s earning potential, the price included a $40,000 ...Steven Truck Company has been an 80%-owned subsidiary of Paulz Heavy Equipment since January 1, 2013, when Paulz acquired 128,000 shares of Steven common stock for $832,000, an amount equal to the book value of Steven’s ...Princess Company acquired a 90% interest in Sundown Company on January 1, 2011, for $675,000. Any excess of cost over book value was due to goodwill. Capital balances of Sundown Company on January 1, 2011, were as ...
Post your question