Solved

Which of the Following Statements Is True

Question 33

Multiple Choice

Which of the following statements is true?

A) When one affiliate purchases another affiliate's bonds prior to the business combination, the bonds become an intercompany debt as of the business combination date and thus are viewed, for consolidate purposes, as being retired on the purchase date.
B) When one affiliate purchases another affiliate's bonds prior to the business combination, the bonds become an intercompany debt as of the purchase date and thus are viewed as being retired on the purchase date if the yield rate on date of purchase is greater than the original yield rate.
C) When one affiliate purchases another affiliate's bonds prior to the business combination, the bonds become an intercompany debt as of the purchase date and thus are viewed as being retired on the purchase date if the yield rate on date of purchase is less than the original yield rate.
D) All of the above answers are false.

Correct Answer: