On january 1 2009 riley corp. acquired some of the, Ask an Expert

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On January 1, 2009, Riley Corp. acquired some of the outstanding bonds of one of its subsidiaries. The bonds had a carrying value of $421,620 and Riley paid $401,937 for them. How should you account for the difference between the carrying value and the purchase price in the consolidated financial statements for 2009?

• The difference is added to the carrying value of the debt

• The difference is deducted from the carrying value of the debt

• The difference is treated as a loss from the extinguishment of the debt

• The difference is treated as a gain from the extinguishment of the debt

• The difference does not influence the consolidated financial statements

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M965790

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