Question: When a parent company sells land to a subsidiary at
When a parent company sells land to a subsidiary at more than book value, the consolidation elimination entries at the end of the period include a debit to the gain on the sale of land. When a parent purchases the bonds of a subsidiary from a nonaffiliate at less than book value, the elimination entries at the end of the period contain a credit to a gain on bond retirement. Why are these two situations not handled in the same manner in the consolidation worksheet?
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