Answer:
hello your question has a missing journal entry table attached below is the entry journal table completely filled 
Explanation:
Amount of bonds acquired = 40% of original bond
i) Bonds payable = 40% * 1,300,000
                            = $520000
purchase price of bonds = $520000 * 96% ( FACE VALUE )
                                          = $499200
hence the annual amortization 
(bonds payable - purchase price of bonds ) / 10 years - 2 years 
(520000 - 499200 ) / 8  = $20800/8 = $2600
ii) premium on bonds payable
 $20800 - $2600 = $18200
cash amount = $520000 * 8% = $41600
intra entity expense and income table is attached below 
from the table 
iii) intra-entity interest expense = $39000 and the
iv) intra-entity interest income = $44200
v) investment in bonds 
purchase price of bonds + annual amortization 
= $499200 + $2600 = $501800
the book value on bonds as at 1st January 2011 
=$1300000 * 105% = $1365000
Premium on bonds as at January 1st 2011
= $1365000 - $1300000 = $65000
amortization of premium as at January 1st 2011
=( ($65000) / 10 years ) * 2 years 
= $13000
hence the controlling interest in bonds payable = $540800
vi) gains on retirement bonds 
=  $540800 - $499200 = $41600
attached below is the journal entry on 31st December 2013