E 7-2 General problems Son Corporation is a 70 percent-owned subsidiary of Pop Corporation. On January 2, 2016, Son purchased $600,000 par of Pop's $900,000 outstanding bonds for $602,000 in the bond market. Pop's bonds have an 8 percent interest rate , Interest on January July 1, and mature on January 1, 2020. There was $48,000 unamortized premium on the Dond issue on January 1, 2016. Assume straight-line amortization. 1. The constructive gain or loss that should appear in the consolidated income statement of Pop Corporation and Subsidiary for 2016 is: a $30,000 gain $46,000 gain $2,000 loss $30,000 loss 2 Interest expense that should appear in the 2016 consolidated Income statement for Pop's bond issue is: $28,000 $24,000 6 $20,800 $20,000