Fargus Corporation owned 51% of the voting common stock of Sanatee, Inc. The parent's interest was acquired several years ago on the date that the subsidiary was formed. Consequently, no goodwill or other allocation was recorded in connection with the acquisition price.

On January 1, 2012, Sanatee sold $1,400,000 in ten-year bonds to the public at 108. The bonds pay a 10% interest rate every December 31. Fargus acquired 40% of these bonds on April 1, 2014, for 95% of the face value. Both companies utilized the straight-line method of amortization.

1) Determine whether this is a gain or loss on retirement of bond on Apr 1, 2014. Show work

2) What is the consolidated Interest Expense on Dec 31, 2014. Show work

3) If Fargus has Net income 200,000 and manatee has net income of 50,000 in 2014, how much is the consolidated net income?