When a Parent company acquires from an unaffiliated third party a Subsidiarys debt instruments (or vice versa), the consolidated financial statements should recognize gain or loss on constructive retirement of the debt. Thereafter, the [I bond] consolidation entry is required to correct the beginning balance of the Equity investment account. Why is this adjustment required? Why does the amount of this gradually decline over the remaining life of the bonds?

This is literally the question from the book. That is all of it.