If a parent company reports interest expense of $4,300 with respect to bonds held intercompany and the subsidiary reports interest income of $4,500 for the same bonds,

(a) Was there a constructive gain or loss on the bonds?

(b) Is the gain or loss attributed to the parent company or the subsidiary? and

(c) What does the $200 difference between interest income and interest expense represent?

AppendixLO1