Moon Corporation issued $300,000 par value 10-year bonds at 107 on January 1, 20X3, which Star Corporation purchased. Sun Corporation owns 65% of Moon's voting shares. On Jan 1, 20X7, Sun Corporation purchased $120,000 face value of Moon bonds from Star for $118,020. On the date Sun purchased the bonds, the bonds' carrying value on Moon's book was $126,019. The bonds pay 12 percent interest annually on December 31. The preparation of consolidated financial statements for Moon and Sun at December 31, 20X9, required the following eliminating entry: Based on the information given above, what amount of gain or loss on bond retirement is included in the 20X7 consolidated income statement?

Question

Moon Corporation issued $300,000 par value 10-year bonds at 107 on January 1, 20X3, which Star Corporation purchased. Sun Corporation owns 65% of Moon's voting shares. On Jan 1, 20X7, Sun Corporation purchased $120,000 face value of Moon bonds from Star for $118,020. On the date Sun purchased the bonds, the bonds' carrying value on Moon's book was $126,019. The bonds pay 12 percent interest annually on December 31. The preparation of consolidated financial statements for Moon and Sun at December 31, 20X9, required the following eliminating entry:  Based on the information given above, what amount of gain or loss on bond retirement is included in the 20X7 consolidated income statement?

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The Answer of Moon Corporation issued $300,000 par value 10-year bonds at 107 on January 1, 20X3, which Star Corporation purchased. Sun Corporation owns 65% of Moon's voting shares. On Jan 1, 20X7, Sun Corporation purchased $120,000 face value of Moon bonds from Star for $118,020. On the date Sun purchased the bonds, the bonds' carrying value on Moon's book was $126,019. The bonds pay 12 percent interest annually on December 31. The preparation of consolidated financial statements for Moon and Sun at December 31, 20X9, required the following eliminating entry:  Based on the information given above, what amount of gain or loss on bond retirement is included in the 20X7 consolidated income statement?

Moon Corporation Issued $300,000 Par Value 10-Year Bonds at 107