E 7-3 Constructive gain on purchase of parent bonds pam Corporation's long-term debt on January 1, 2016, consists of $400,000 par value of 10 percent bonds payable due on January 1, 2020, with an unamortized discount of $8,000. On January 2, 2016, Sun Corporation, Pam's 90 percent 10 percent bonds for $76,000. Interest payment dates are January 1. On the consolidated Income statement of Pam Corporation and Subsidiary for 2016, a gain or loss should be reported no 1 and July 1, and straight-line amortization is used. en in the amount of . $5,600 loss b $4,000 gain c $2,400 gain d $2,000 loss 2. Bonds payable of Pam less unamortized discount appears in the consolidated balance sheet at December 31, 2016, in the amount of: a $392,000 b$394,000 c $320,000 d $315,200 3. The amount of the constructive gain or loss that is unrecognized on the separate books of Pam and Sun at December 31, 2016, is: a $2,400 b$2,200 C$1,800 d SO 4. Interest expense on Pam bonds appears in the consolidated income statement for 2016 at: a $42,000 b $40,000 c$33,600 d $32,000 5. Consolidated net income for 2017 will be affected by the intercompany bond transactions as follows: a Increased by 100 percent of the constructive gain from 2016 b Decreased by 25 percent of the constructive gain from 2016 c Increased by 25 percent of the constructive loss from 2016 d Decreased by (25% ~ 90%)of the constructive loss from 2016