Use the following information to answer Questions 1 and 2.

Pollard Corporation owns 90% of the outstanding common stock of Steele Company. On January 1, 2008, Steele Company issued $500,000, 12%, ten-year bonds.

On January 1, 2010, Pollard Corporation paid $412,000 for Steele Company bonds with a par value of $400,000 and a carrying value of $393,600. Both companies use the straight-line method to amortize bond premiums and discounts. Pollard Corporation accounts for the investment using the cost method of accounting.

1. The total gain or loss on the constructive retirement of the debt to be reported in the 2010 consolidated income statement is: Show the calculation

2. Pollard Corporation would report a balance in the Investment in Steele Company Bonds account on December 31, 2010, of: Show the calculation