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6) Constructive retirement of parent's bonds Pad Corporation has $4,000,000 of 12 percent bonds outstanding on December 31,2011 , with unamortized premium of $120,000. These bonds pay interest semiannually on July 1 and January 1 and mature on January 1,2017. On January 2, 2012, sal Corporation, an 80 percent-owned subsidiary of Pad, purchases $1,000,000 par of Pad's outstanding bonds in the market for $980,000. ADDITIONAL INFORMATION 1. Pad and Sal use the straight-line method of amortization. 2. The financial statements are consolidated. 3. Pad's bonds are the only outstanding bonds of the affiliated companies. REQUIRED a. Compute the constructive gain or loss that will appear in the consolidated income statement for 2012. b. Prepare a consolidation entry (entries) at December 31, 2012, to eliminate the effect of the intercompany Bondholdings