Bradley Corporation sold bonds to Flood Company in 20X2 at 90. At the end of 20X4, Century Corporation purchased the bonds from Flood at 105. Bradley then retired the full bond issue on December 31, 20X7, at 101. Century holds 80 percent of Bradley's voting stock. Neither Century nor Bradley owns stock of Flood Company.

Required
a. Indicate how each of the three bond transactions should be recorded by the companies involved.
b. Indicate when, if at all, the consolidated entity headed by Century should recognize a gain or loss on bond retirement, and indicate whether a gain or a loss should be recognized.
c. Will income assigned to Bradley's noncontrolling shareholders be affected by the bond transactions? If so, in which years?