p co purchased term bonds at a premium on the open market these bonds represented 20 605560
P Co. purchased term bonds at a premium on the open market. These bonds represented 20% of the outstanding class of bonds issued at a discount by S Co., P’s wholly owned subsidiary. P intends to hold the bonds until maturity. In a consolidated balance sheet, the difference between the bond carrying amounts in the two companies would
- Decrease retained earnings.
- Increase retained earnings.
- Be reported as a deferred debit to be amortized over the remaining life of the bonds.
- Be reported as a deferred credit to be amortized over the remaining life of the bonds.