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Which of the following statements is true ? a. ...

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Question

Accounting

Which of the following statements is true ?

a.

The constructive gain or loss from the subsidiarys purchase of all or part of the parents outstanding bonds will appear in the consolidated income statement in the year the subsidiary purchased the bonds.
b.

A parent company is not allowed to issue bonds directly to its subsidiary company since the SEC does not permit a subsidiary to loan money directly to its parent company.
c.

The purchasing affiliate receives no interest on intercompany bonds that have been constructively retired, because any intercompany interest receivable has been eliminated in a worksheet entry.
d.

If half of a parent companys outstanding bonds are held by its subsidiary for the entire year, then none of the interest payable on the parents balance sheet will be eliminated in the consolidation worksheet because the payable represents an actual future cash transfer that must be made by the parent.

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