Eliminated for consolidation purposes

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Reference no: EM13137838

A subsidiary has a debt outstanding that was originally issued at a discount. At the beginning of the current year, the parent company acquired the debt at a slight premium from outside parties. Which of the following statements is true?

A - The interest income and interest expense will agree in amount and should be offset for consolidation purposes.

B - Whether the balances agree or not, both the subsequent interest income and interest expense should be reported in a consolidated income statement.

C - Although subsequent interest income and interest expense will not agree in amount, both balances should be eliminated for consolidation purposes.

D - In computing any noncontrolling interest allocation, the interest income should be included but not the interest expense.

Reference no: EM13137838

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