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 $960,000 of bonds payable (par) outstanding with a carrying value of $1,008,000. The bonds were originally issued to an unaffiliated company. On that same date, the Subsidiary acquired the bonds for $950,400. During 2019, the Parent company reported $432,000 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 $240,000 of (pre-consolidation) income from its own operations after recording interest income. Related to the bonds during 2019, the parent reported interest expense of $108,000 while the subsidiary reported interest income of $98,400. 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	Answer
b. Interest expense on bond payable	Answer
c. Gain (loss) on constructive retirement of bond payable	Answer
d. Consolidated net income	Answer