Police Corporation purchased 70 percent of Station Company’s voting shares on January 1, 20X4, at underlying book value. On that date it also purchased $100,000 par value 12 percent Station bonds, which had been issued on January 1, 20X1, with a 10-year maturity. During preparation of the consolidated financial statements for December 31, 20X4, the following consolidation entry was made in the worksheet:

Required

a. What price did Police pay to purchase the Station bonds?

b. What was the carrying amount of the bonds on Station’s books on the date of purchase?

c. If Station reports net income of $30,000 in 20X5, what amount of income should be assigned to the noncontrolling interest in the 20X5 consolidated income statement?

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Bonds Pavable Bond Premium Loss on Bond Retirement Interest Income Investment in Station Company Bonds Interest Expense 100.000 6,000 3,500 ? 109,000 ?