Final answer:
The difference between the book value of a bond liability and the purchase price of the bond investment is not considered a gain or loss for consolidated statement purposes.
Step-by-step explanation:
The statement is False. The difference between the book value of a bond liability and the purchase price of the bond investment is not considered a gain or loss for consolidated statement purposes. The book value of a bond liability represents the carrying value of the bond on the company's books, which is the original cost minus any amortization of discount or plus any amortization of premium. The purchase price of the bond investment, on the other hand, is the amount paid to acquire the bond.
For consolidated statement purposes, any gain or loss related to bond investments is typically realized when the bonds are sold or redeemed before their maturity date. The gain or loss is calculated as the difference between the sale or redemption price and the carrying value of the bond at the time of sale or redemption. In summary, the difference between the book value of a bond liability and the purchase price of the bond investment is not considered a gain or loss for consolidated statement purposes.