The net impact of the purchase


Company P owns 80% of Company S. On January 1, 20X3, Company S has outstanding 6% bonds with a face value of $200,000 and an unamortized discount of $3,000, which is being amortized on a straight-line basis over a remaining term of 10 years. On January 1, 20X3, Company P purchased all the bonds for $205,000. The premium also is amortized on a straight-line basis. The net impact of the purchase on the noncontrolling interest as of December 31, 20X3, is.

a. $(8,000)

b. $(1,600)

c. $(1,440)

d. $(1,200)

 

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Accounting Basics: The net impact of the purchase
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