When a Parent company acquires from an unaffiliated third party a Subsidiarys debt instruments (or vice versa),

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When a Parent company acquires from an unaffiliated third party a Subsidiary’s debt instruments (or vice versa), the consolidated financial statements should recognize gain or loss on constructive retirement of the debt. Thereafter, the [I bond] consolidation entry is required to correct the beginning balance of the Equity investment account. Why is this adjustment required? Why does the amount of this gradually decline over the remaining life of the bonds?

Posted Date: Oct 27, 2021 09:57 AM

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When a Parent company acquires from an unaffiliated third party a Subsidiarys debt instruments (or vice versa),

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Since the debt instrument was acquired for the subsidiary by the parent company via an unaffiliated ... View the full answer

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