When a parent purchases a portion of the newly issued stock of its subsidiary and the parent's percentage of ownership interest remains the same,
A)any difference between the change in equity and the price paid is the excess of cost or book value attributable to the new block.
B)any difference between the change in equity and the price paid is viewed as a gain or loss on the sale of an interest.
C)any difference between the change in equity and the price paid is viewed as a change in paid-in capital or retained earnings.
D)there will be no adjustment to parent's paid-in capital

Question

When a parent purchases a portion of the newly issued stock of its subsidiary and the parent's percentage of ownership interest remains the same,
A)​any difference between the change in equity and the price paid is the excess of cost or book value attributable to the new block.
B)​any difference between the change in equity and the price paid is viewed as a gain or loss on the sale of an interest.
C)​any difference between the change in equity and the price paid is viewed as a change in paid-in capital or retained earnings.
D)​there will be no adjustment to parent's paid-in capital

Quizplus · Accepted Answer

When a parent purchases a portion of the newly issued stock of its subsidiary and the parent's percentage of ownership interest remains the same, there will be no adjustment to the parent's paid-in capital because the transaction does not change the parent's overall ownership percentage in the subsidiary.

When a Parent Purchases a Portion of the Newly Issued