Accounting Essay

Rosie Corporation has 70% of the outstanding voting stock of Smith Corporation and 10% of the voting stock of Tommy Corporation. Smith also just spent $10,000 to acquire 20% of Tommy’s voting stock. Smith has issued irrevocable letters of credit to guarantee Tommy’s notes payable. In the current year, Tommy lost $100,000. How should the parties report the above arrangements in its consolidated financial statements?

In APA format, approximately 300 words using FASB and GASB codification.