Highlight, Inc., owns all outstanding stock of Kiort Corporation. The two companies report the following balances for the year ending December 31, 2020:

On January 1, 2020, Highlight acquired on the open market bonds for $108,000 originally issued by Kiort. This investment had an effective rate of 8 percent. The bonds had a face value of $100,000 and a cash interest rate of 9 percent. At the date of acquisition, these bonds were shown as liabilities by Kiort with a carrying amount of $84,000 (based on an effective rate of 11 percent). Determine the balances that should appear on a consolidated income statement for 2020.

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Highlight Kiort $(670,000) 540,000 $(390,000) 221,000 Revenues and interest income. Operating and interest expense Other gains and losses (120,000) $(250,000) (32.000) $(201,000) Net income..