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Sibling Company issued $$530,000$ par value, $10-$year bonds at $104$ on January $1,20$X$3,$ which Mega Corporation purchased. The coupon rate on the bonds is $12$ percent. Interest payments are made semiannually on July $1$ and January $1.$ On July $1,20$X$6,$ Parent Company purchased $$212,000$ par value of the bonds from Mega for $$204,200.$ Parent owns $70$ percent of Sibling$$s voting shares.

Required:

What amount of gain or loss will be reported in Sibling$$s $20$X$6$ income statement on the retirement of bonds?

Will a gain or loss be reported in the $20$X$6$ consolidated financial statements for Parent for the constructive retirement of bonds? What amount will be reported?

How much will Parent$$s purchase of the bonds change consolidated net income for $20$X$6?$

Prepare the worksheet consolidation entry or entries needed to remove the effects of the intercorporate bond ownership in preparing consolidated financial statements at December $31,20$X$6.$

Prepare the worksheet consolidation entry or entries needed to remove the effects of the intercorporate bond ownership in preparing consolidated financial statements at December $31,20$X$7.$

If Sibling reports net income of $$53,000$ for $20$X$7,$ what amount of income will be assigned to the noncontrolling interest in the consolidated income statement?

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