In years subsequent to the year one member of a consolidated group purchases another member's outstanding bonds from outside parties, Consolidated Income Statements:

Question

In years subsequent to the year one member of a consolidated group purchases another member's outstanding bonds from outside parties, Consolidated Income Statements:​

Quizplus · Accepted Answer

When a member of a consolidated group purchases another member's outstanding bonds from outside parties, the consolidation process eliminates any intercompany bonds and related gains or losses. Therefore, the consolidated income statement would not recognize any gain or loss from intercompany bonds.

In Years Subsequent to the Year One Member of a Consolidated