$12(2\mathrm{.}0$ points$)$

On January $1,2021,$ a Parent company has a debt outstanding that was originally issued at a discount and was purchased, on issuance, by an unaffiliated party. On July $1,2021,$ a Subsidiary of the Parent purchased the debt from the unaffiliated party. The debt was purchased by the Subsidiary at a slight premium.

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The Parent is a calendar year company. Which one of the following statements is true?

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a$.$ The consolidated balance sheet at December $31,2021$ will report none of the debt, and the consolidated income statement for the year ended December $31,2021$ will not report any interest expense from the debt.

b$.$ The consolidated balance sheet at December $31,2021$ will report none of the debt, and the consolidated income statement for the year ended December $31,2021$ will report a gain or loss from the constructive retirement of the debt and will report some interest expense from the debt.

c$.$ The consolidated balance sheet at December $31,2021$ will report none of the debt, and the consolidated income statement for the year ended December $31,2021$ will report a gain or loss from the constructive retirement of the debt and will not report any interest expense from the debt.

d$.$ The consolidated balance sheet at December $31,2021$ will report the debt, and the consolidated income statement for the year ended December $31,2021$ will report a gain or loss from the constructive retirement of the debt and will not report any interest expense from the debt.