In question 4, why is the consolidation process simpler if the bonds had been acquired directly from the subsidiary than from a third party?
Answer to relevant QuestionsWhen 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?When is a sponsoring firm required to consolidate the financial statements of a VIE with its own financial statements?Washburn Company owns 75 percent of Metcalf Company’s outstanding common stock. During the current year, Metcalf issues additional shares to outside parties at a price more than its per share consolidated value. How does ...On January 1, Tesco Company spent a total of $4,384,000 to acquire control over Blondel Company. This price was based on paying $424,000 for 20 percent of Blondel’s preferred stock and $3,960,000 for 90 percent of its ...Darges owns 51 percent of the voting stock of Walrus, Inc. The parent’s interest was acquired several years ago on the date that the subsidiary was formed. Consequently, no goodwill or other allocation was recorded in ...
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