Parent owns 100% of Sub. On the open market, parents buy all bonds of the Sub for
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Parent owns 100% of Sub. On the open market, parents buy all bonds of the Sub for $900,000 on January 1, 2021. The par value of these bonds on ledger for Sub is $750,000. Interest is paid annually at 7%. On the books of the Sub there is an unamortized discount of $50,000. The fiscal year-end is December 31. The bonds mature in five years.
What would be the pre-tax gain or loss to the consolidated entity on the intercompany sale of the bonds?
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