E 7-10 Constructive retirement of parent's bonds Pop Corporation has $8,000,000 of 12 percent bonds outstanding on December 31, 2016, with unamortized premium of $240,000. These bonds pay interest semiannually on July 1 and January 1 and mature on January 1, 2022. On January 2, 2017, Son Corporation, an 80 percent-owned subsidiary of Pop, purchases $2,000,000 per of Pop's outstanding bonds in the market for $1,960,000 ADDITIONAL INFORMATION 1. Pop and Son use the straight-line method of amortization, 2. The financial statements are consolidated, 2. Pop' bonds are the only outstanding bonds of the affiliated companies 4. Son's net income for 2017 is $800,000 and for 2018. 51,200,000 REQUIRED 1. Compute the constructive pain or loss that will appear in the consolidated income statement for 2017, 2. Prepare a consolidation entry (entries) at December 31, 2017 to eliminate the effect of the intercompany bondholdings a Compute the amounts that will appear in the consolidated income statement for 2018 for the following: Constructive gain or loss 1. No controlling interest share e. Band interest expense 4. Band interest income 4 Compute the amounts that will appear in the conlidated balance sheet at December 31, 2015, for the Investment in Pop boods Bok value of beds payable Bond interest receivable Bond interest payable