Comparative income statements for Pam Corporation and its 100 percent-owned subsidiary, Sun Corporation, for the year ended December 31, 2024, are summarized as follows:

Pam purchased its interest in Sun at fair value equal to book value on January 1, 2016. On January 1, 2017, Pam sold $500,000 par of 10 percent, 10-year bonds to the public at par, and on January 2, 2024, Sun purchased $200,000 par of the bonds at 97. The companies use straight-line amortization. There are no other intercompany transactions between the affiliates.
REQUIRED:
Prepare a consolidated income statement for Pam Corporation and Subsidiary for the year ended December 31, 2024.

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Pam Sun $500,000 22,000 (200,000) Sales Income from Sun Bond interest income (includes $1,000,000 226,000 discount amortization) Cost of sales Operating expenses Bond interest expense (670,000) (150,000) (50,000) $356,000 (100,000) Net income $222,000