Chapter 8, Problem 8.6A.2E

To determine

Introduction:

Retirement of bonds: Under constrictive retirement, the gain or loss on retirement of bonds is reported only in the consolidated income statement, if the bonds of an affiliate are purchased from an unconnected entity value equal to the liability on such bonds is reported, before preparation of the consolidated financial statement, all effects of gain or loss and liability is eliminated.

To choose: The correct answer to determine the amount of gain or loss on bond retirement included in 20X4 consolidated income statement