Question: A subsidiary issues bonds. The parent can then acquire the bonds either directly from the subsidiary or from a nonaffiliate that had originally acquired the

A subsidiary issues bonds. The parent can then acquire the bonds either directly from the subsidiary or from a nonaffiliate that had originally acquired the subsidiary's bonds.

a) Discuss the parent's accounting as it relates to the preparation of consolidated financial statements, for their acquisition of the bonds:

1. from the nonaffiliate. 2. directly from the subsidiary.

b) Why does it matter who the bonds are acquired from?

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