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Would this be a $5200 gain or loss? Required Information Saturn Corporation issued $300,000 par value 10-year bonds at 107 on January 1, 20X3, which
Would this be a $5200 gain or loss?
Required Information Saturn Corporation issued $300,000 par value 10-year bonds at 107 on January 1, 20X3, which Star Corporation purchased. Pluto Corporation owns 65% of Saturn's voting shares. On Jan 1, 20X7, Pluto Corporation purchased $120,000 face value of Saturn bonds from Star for $118,020. On the date Pluto purchased the bonds, the bonds' carrying value on Saturn's book was $126,019. The bonds pay 12 percent Interest annually on December 31. The preparation of consolidated financial statements for Saturn and Pluto at December 31, 20X9, required the following consolidating entry: 129, eee 3,470 14,795 Bonds Payable Premium on Bonds Payable Interest Income Investment in Saturn Corporation Bonds Interest Expense Investment in Saturn Corporation Stock NCI in NA of Saturn Corp. 118,838 13,461 3,819 2,257 Based on the Information given above, what amount of gain or loss on bond retirement is included in the 20x7 consolidated Income statement? Multiple Choice $8.000 gain $5.200 gain $8.000 loss $5,200 lossStep by Step Solution
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