bonds at 115. Annual interest of 12 percent is pald semiannually on January 1 and July 1. Pepper Pepper Enterprises owns 95 percent of Salt Corporation. On January 1, 20X1, Salt issued 5300,000 of tive-year purchased $200,000 of the bonds on August 31, 20x3, at par value. The following balances are taken from the separate 20x3 financial statements of the two companies: Note: Assume using straight-line amortization of bond discount or premium $205,700 9,500 12,000 Investment in Salt Corporation Bonds Interest Income Interest Receivable Bonds Payable Bond Premium Irnterest Expense Interest Payable $300,000 33,000 27,000 24,000 Required: a. Compute the amount of interest expense that should be reported in the consolidated income statement for 20x3. (Do not round intermediate calculations. Round your final answer to nearest whole dollar.) b. Compute the gain or loss on constructive bond retirement that should be reported in the 20X3 consolidated income statement. (Do not round intermediate calculations. Round your final answer to nearest whole dollar.) c. Prepare the consolidation worksheet consolidation entry or entries as of December 31, 20X3, to remove the effects of the intercorporate bond ownership