Question: When the parent lends the subsidiary and accepts a note for the debt _ _ _ _ _ . A . The interest revenue and

When the parent lends the subsidiary and accepts a note for the debt

_____.

.

The interest revenue and interest expense recorded in the two companies' individual books will not be eliminated in their income distribution schedules.

.

All of these statements are correct.

.

When the parent discounts the note at a non

-

affiliated bank, only the interest revenue on the note will be reported on the consolidated financial statements, while the interest expense will be eliminated.

.

The interest revenue and interest expense recorded in the two companies' individual books will always be reported on the consolidated financial statements.

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