If Newly Issued Debt Is Issued from a Parent to Its

Multiple Choice

If newly issued debt is issued from a parent to its subsidiary, which of the following statements is false?

A) Any premium or discount on bonds payable is exactly offset by a premium or discount on bond investment.
B) There will be $0 net gain or loss on the bond transaction.
C) Interest expense needs to be eliminated on the consolidated income statement.
D) Interest revenue needs to be eliminated on the consolidated income statement.
E) A net gain or loss on the bond transaction will be reported.