Regency corp. recently acquired $500,000 of the bonds of safire co., one of its subsidiaries, paying more than the carrying value of the bonds. according to the most practical view of this intra-entity transaction, to whom would the loss be attributed? a) to safire because the bonds were issued by safire. b) the loss should be allocated between safire and regency based on the purchase price and the original face value of the debt. c) the loss should be amortized over the life of the bonds and need not be attributed to either party. d) the loss should be deferred until it can be determined to whom the attribution can be made. e) to regency because regency is the controlling party in the business combination.

Garrett is an executive vice president at samm hardware. he researches a proposal by a larger company, maximum hardware, to combine the two companies. by analyzing past performance, conducting focus groups, and interviewing maximum employees, garrett concludes that maximum has poor profit margins, sells shoddy merchandise, and treats customers poorly. what actions should garrett and samm hardware take? a. turn down the acquisition offer and prepare to resist a hostile takeover. b. attempt a friendly merger and use managerial hubris to improve results at maximum. c. welcome the acquisition and use knowledge transfer to impart sam hardware's management practices. d. do nothing; the two companies cannot combine without samm hardware's explicit consent.