Stemberger Company Issued 10-Year, 8% Bonds with a Par Value

Stemberger Company issued 10-year, 8% bonds with a par value of $1,000,000 on January 2, 2012, for $1,040,000.Interest is payable semiannually on June 30 and December 31.On December 31, 2013, Putter Company purchased $700,000 of Stemberger par value bonds for $670,000.Stemberger is an 80% owned subsidiary of Putter.Both companies use the straight-line method to amortize bond discounts and premiums.Stemberger declared cash dividends of $100,000 in 2013 and reported net income of $220,000 for the year.
Putter reported net income of $350,000 for 2013 and paid dividends of $160,000 during 2013.
Required:
A.Compute the total gain or loss on the constructive retirement of the debt.
B.Allocate the total gain or loss between Stemberger Company and Putter Company.
C.Compute the controlling interest in consolidated net income for 2013.
D.Prepare in general journal form the intercompany bond elimination entries for the consolidated statements workpaper prepared on December 31, 2013.