Pacelli Company issued 10-year, 11% bonds with a par value of $1,200,000 on January 2, 2013, for $1,128,000. Interest is paid semiannually on June 30 and December 31. On December 31, 2014, $960,000 of the par value bonds were purchased by Salez Company for $980,000. Salez Company is an 80%-owned subsidiary of Pacelli Company. Both companies use the straight-line method to amortize bond discounts and premiums.

Salez Company declared cash dividends of $55,000 each year during the period 2014-2015.

Compute the total gain or loss on the constructive retirement of debt.

Total constructive jQuery22406095909879002022_1573322445738

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