Pesto Company possesses 80 percent of Salerno Company's outstanding voting stock. Pesto uses the initial value method to account for this investment On January 1, 2017, Pesto sold 8 percent bonds payable with a $6.0 million face value (maturing in 20 years) on the open market at a premium of $1.040.000. On January 1, 2020, Salerno acquired 40 percent of these same bonds from an outside party at 96.6 percent of face value. Both companies use the straight-line method of amortization. For a 2021 consolidation, what adjustment should be made to Pesto's beginning Retained Earnings as a result of this bond acquisition? Multiple Choice $420,000 increase $435,200 Increase 5409.800 Increase $430, 400 Increase