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What gain or loss on bond retirement should be shown

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On January 1, 2009, Sandra Co's long term liabilities consists of P400,000 par value 10% bonds payable due on January 1, 2013 with unamortized discount of P8,000. On January 2, 2009, Bullock Corp which is Sandra's 90% owned subsidiary purchased P80,000 of its par value bonds for P76,000. Interest payment dates are January 1 and July 1. Straight line amortization is used.

problem 1: What gain or loss on bond retirement should be shown in the consolidated income statement on December 31, 2009?

Option 1: 4,000 gain

Option 2: 5,600 loss

Option 3: 2,000 loss

Option 4: 2,400 gain

Reference no: EM132780814

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