Prezo Company purchased 80% of Satz Company's common stock for $880,000 on January 2, 2014. Condensedfinancial information for Prezo Company and Satz Company is given below.

On July 1, 2014, Prezo Company purchased 60% of Satz Company's bonds for $ 247,071 (a 9% yield). The bondsmature on December 31, 2017. Interest of 10% per annum is paid on June 30 and December 31 each year. Bothcompanies use the effective interest method to amortize bond discounts and premiums. The Satz Co. bond wasoriginally issued to yield 8% and Prezo Company's bond was issued at par.

Prezo Co. Satz Co.

Bonds Payable (10%) $700,000 $400,000

Premium on Bonds Payable $20,968

Investment in Satz Company Common Stock $880,000

Investment in Satz Company Bonds $246,189

How would I compute the gain or loss on the constructive retirement of the bonds allocated to each of the affiliated companies?