Comparative balance sheets of Pit and Sal Corporations at December 31, 2011, follow:

Pit acquired 80 percent of Sal's capital stock for $3,320,000 on January 1, 2009, when Sal's capital stock was $4,000,000 and its retained earnings was $150,000.
On January 2, 2011, Pit acquired $400,000 par of Sal's 10 percent bonds in the market for $391,000, on which date the unamortized premium for bonds payable on Sal's books was $90,000. The bonds pay interest on January 1 and July 1 and mature on January 1, 2016. (Assume straight-line amortization.)
1. The gain or loss on the constructive retirement of $400,000 of Sal bonds on January 2, 2011, is reported in the consolidated income statement in the amount of:
a. $27,000
b. $23,000
c. $21,000
d. $14,000
2. The portion of the constructive gain or loss on Sal bonds that remains unrecognized on the separate books of Pit and Sal at December 31, 2011, is:
a. $24,000
b. $21,600
c. $21,000
d. $18,400
3. Consolidated bonds payable at December 31, 2011, should be reported at:
a. $2,072,000
b. $2,000,000
c. $1,657,600
d. $1,600,000

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Accounts receivable-net 2,048,600 Other current assets 400,000 2 Investment in Sal stock Investment in Sal bonds Total assets $20,000,000 Liabilities and Stockholders Equity Interest payable 10% bonds payable 3,200,000 $20,000,000