E 7-4 Subsidiary purchases parent bonds Pop Company acquired an 80 percent interest in Son Company on January 1, 2016, for $1,600,000 in excess of book value and fair value. On January 1, 2019, Pop had $4,000,000 par, 8 percent bonds outstanding with a $160,000 unam- ortized discount. On January 2, 2019, Son purchased $1,600,000 par of Pop's bonds at par. The bonds mature on January 1, 2023, and pay interest on January 1 and July 1. Pop's separate income, not including investment income, for 2019 is $3,200,000, and Son's reported net income is $2,000,000.