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Question 16 Not yet answered Company S is a 100%-owned subsidiary of Company P. Company S has outstanding 6%, 10-year bonds sold to yield 7%. On January 1 of the current year, Company P purchased all of the Company S outstanding bonds at a price that reflected the current 9% effective interest rate. How should this event be reflected in the current year's consolidated statements? Points out of 4.00 P Flag question Select one: O a. The bonds remain in the balance sheet and are accounted for at a 9% effective rate. b. Retirement of the bonds at a loss as of the purchase date. c. Retirement of the bonds at a gain as of the purchase date. O d. The bonds remain in the balance sheet and are accounted for at a 7% effective rate. Question 17 Not yet answered Points out of 4.00 Company S is a 100%-owned subsidiary of Company P. On January 1, 2016, Company S had $100,000 of 8% rate bonds outstanding. The bonds had 5 years to maturity on January 1, 2016, and had an unamortized discount of $5,000. On that date, Company P purchased the bonds for $99,000. The net adjustment needed to consolidated retained earnings of the two companies in the consolidation process for 2016 is: P Flag question Select one: O a. 0 O b. 4,000 decrease O c. 3,200 decrease O d. 800 decrease Question 16 Not yet answered Company S is a 100%-owned subsidiary of Company P. Company S has outstanding 6%, 10-year bonds sold to yield 7%. On January 1 of the current year, Company P purchased all of the Company S outstanding bonds at a price that reflected the current 9% effective interest rate. How should this event be reflected in the current year's consolidated statements? Points out of 4.00 P Flag question Select one: O a. The bonds remain in the balance sheet and are accounted for at a 9% effective rate. b. Retirement of the bonds at a loss as of the purchase date. c. Retirement of the bonds at a gain as of the purchase date. O d. The bonds remain in the balance sheet and are accounted for at a 7% effective rate. Question 17 Not yet answered Points out of 4.00 Company S is a 100%-owned subsidiary of Company P. On January 1, 2016, Company S had $100,000 of 8% rate bonds outstanding. The bonds had 5 years to maturity on January 1, 2016, and had an unamortized discount of $5,000. On that date, Company P purchased the bonds for $99,000. The net adjustment needed to consolidated retained earnings of the two companies in the consolidation process for 2016 is: P Flag question Select one: O a. 0 O b. 4,000 decrease O c. 3,200 decrease O d. 800 decrease

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