On January 1, 2014, New Westbury Inc. acquired some of the outstanding bonds of its parent company Old Westbury Inc. The bond had a carrying value of $80,010 in the books of Old Westbury, and New Westbury paid $81,937 of them.

Does New Westbury report loss or gain associated with this transaction in its internal accounting books (if yes, explain how much and gain or loss)?

Does Old Westbury report loss or gain associated with this transaction in its consolidated financial statements (if yes, explain how much and gain or loss)?

Answer rating: 100% (QA)

In an intercompany bond acquisition like the one described where a subsidiary New Westbury Inc acqui... View the full answer