Plat Incorporated purchased 80% of Scar Company several years ago when the fair value equaled the book value. On January 1, 2019, Scar has $100,000 of 8% bonds that were issued at face value and have five years to maturity. Interest is paid annually on December 31. On January 1, 2020, Plat purchased all of Scar's bonds for $96,000. Both Plat and Scar would use the straight-line method to amortize any premium or discount incurred in the issuance or purchase of bonds.

Required: 1.Calculate gain/loss from the effective retirement on January 1, 2020; (specify if gain or loss) 2. Calculate the annual interest expense/revenue for Scar and Plat for 2020; 3.Prepare the consolidating working paper entries required for the year ending December 31, 2020.