Aaron,a holder of a $200,000 Post Inc.bond,collected the interest due on June 30,20X2,and then sold the bond to Stick Inc.for $185,000.On that date the bond issuer,Post,an 80 percent owner of Stick,had a $220,000 carrying amount for this bond.
-Based on the information given above,what was the effect of Stick's purchase of Post's bonds on the noncontrolling interest amount reported in Post's June 30,20X2 consolidated balance sheet?

Question

Quizplus · Accepted Answer

The purchase of Post's bonds by Stick, an 80% owned subsidiary, is an intercompany transaction. In consolidated financial statements, intercompany transactions and balances are eliminated. Therefore, Stick's purchase of Post's bonds does not affect the noncontrolling interest amount in the consolidated balance sheet.

Aaron,a Holder of a $200,000 Post Inc