prussia corporation owns 80% the voting stock of stad corp. On jan 1,2013, prussia paid $391000 cash for $400,000 par of stad's 10% of $1,000,000 par value outstanding bonds, due on Apr 1,2018. stad's bonds had a book value of $1,045,000 on jan 1,2013. Straight-line amortization is used. the gain or loss on the constructive retirement of $400,000 of stad bonds on jan 1,2013 was reportes in the 2013 consolidated income statement in the amount of