[II] Pearl Company owns 90 percent of the outstanding common stock of Smokey Company. During 2012, Smokey issued $500,000 par value bonds for $520,000. They had a 10 year life and paid 6% interest. In 2014, Pearl bought the entire bond issue on the open market for $450,000. Both companies use the straight-line method to amortize premium or discount. The income and dividends from both companies are listed below. Year Pearl Company Smokey Company Income Dividends Income Dividends 2013 $80,000 $40,000 $60,000 $20,000 2014 100,000 50,000 75,000 20,000 A. Compute the total gain or loss on the constructive retirement of debt B. Allocate the total gain or loss found above between Pearl and Smokey