Parker Company owns 90% of the outstanding common stock of Stagger Company. On January 1, 2014, Stagger Company issued $500,000, 12%, ten-year bonds.

On January 1, 2013, Parker Company paid $315,000 for Stagger Company bonds with a par value of $300,000 and a carrying value of $297,600. Both companies use the straight-line method to amortize bond premiums and discounts. Parker Company accounts for the investment using the cost method of accounting.

Question :

The total gain or loss on the constructive retirement of the debt to be reported in the 2013 consolidated income statement is

a. $15,000 loss.

b. $15,000 gain.

c. $17,400 loss.

d. $17,400 gain.

e. $ 2,400 loss.