Pepper Enterprises owns 95 percent of Salt Corporation. On January 1, 20X1, Salt issued $280,000 of five-year bonds at 115. Annual interest of 12 percent is paid semiannually on January 1 and July 1. Pepper purchased $180,000 of the bonds on July 1, 20X3, at par value. The following balances are taken from the separate 20X3 financial statements of the two companies:

Pepper Enterprises Salt Corporation

Investment in Salt Corporation Bonds $185,700

Interest Income $8,400

Interest Receivable $10,800

Bonds Payable $280,000

Bond Premium $28,800

Interest Expense $25,200

Interest Payable $21,600

Required:

What is the gain or loss on constructive bond retirement that should be reported in the 20X3 consolidated income statement? (Do not round your intermediate calculations. Round your final answer to nearest whole dollar.)

What is the consolidation worksheet consolidation entry or entries as of December 31, 20X3, to remove the effects of the intercorporate bond ownership.? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations. Round your final answers to nearest whole dollar.)