Question: The gain or loss on the constructive retirement of debt
The gain or loss on the constructive retirement of debt is recognized subsequently by the individual companies. Explain.
Relevant QuestionsAllocating the gain or loss on constructive bond retirement between the purchasing and issuing companies is preferred conceptually. Describe how this allocation would be made.Pacelli Company issued 10-year, 10% bonds with a par value of $1,000,000 on January 2, 2010, for $940,000. Interest is paid semiannually on June 30 and December 31. On December 31, 2011, $800,000 of the par value bonds were ...On January 1, 2011, Pacelli Company acquired a 90% interest in Swartz Corporation for $720,000. On this date, Swartz Corporation reported common stock of $500,000 and retained earnings of $200,000. Any difference between ...Cash paid for interest expense amounted $10,000. Where is the cash out flow reported on the statement of cash flows?Prezo Company purchased 80% of Satz Company’s common stock for $880,000 on January 2, 2011. Condensed financial information for Prezo Company and Satz Company is given below.On July 1, 2011, Prezo Company purchased 60% of ...
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