Sibling Company issued $650,000 par value, 10-year bonds at 103 on January 1, 20X3, which...
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Sibling Company issued $650,000 par value, 10-year bonds at 103 on January 1, 20X3, which Mega Corporation purchased. The coupon rate on the bonds is 11 percent. Interest payments are made semiannually on July 1 and January 1. On July 1, 20X6, Parent Company purchased $260,000 par value of the bonds from Mega for $252,100. Parent owns 70 percent of Siblings voting shares.
Will a gain or loss be reported in the 20X6 consolidated financial statements for Parent for the constructive retirement of bonds? What amount will be reported?
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