Consolidated amounts when affiliates debt is acquired from non-affiliate

Assume that a Parent company owns 100 percent of its Subsidiary. On January 1, 2019, the Parent company had $1,200,000 of bonds payable (par) outstanding with a carrying value of $1,260,000. The bonds were originally issued to an unaffiliated company. On that same date, the Subsidiary acquired the bonds for $1,188,000. During 2019, the Parent company reported $540,000 of (pre-consolidation) income from its own operations (i.e., prior to any equity method adjustments by the Parent company) and after recording interest expense. The Subsidiary reported $300,000 of (pre-consolidation) income from its own operations after recording interest income. Related to the bonds during 2019, the parent reported interest expense of $135,000 while the subsidiary reported interest income of $123,000. Determine the following amounts that will appear in the 2019 consolidated income statement:

Note: If no amount will appear on the consolidated income statement, enter zero. If item c. is a loss, use a negative sign with your answer.

Amount a. Interest income from bond investment $ 0 b. Interest expense on bond payable $ C. Gain (loss) on constructive retirement of bond payable $ d. Consolidated net income $ 0 0 0