Exercise $8-3($Static$)$ Bond Sale at Discount $($Effective Interest Method$)$ LO $8-2$

Purse Corporation owns $70$ percent of Scarf Company$$s voting shares. On January $1,20$X$3,$ Scarf sold bonds with a par value of $$600,000$ at $98.$ Purse purchased $$400,000$ par value of the bonds; the remainder was sold to nonaffiliates. The bonds mature in five years and pay an annual interest rate of $8$ percent. Interest is paid semiannually on January $1$ and July $1.$

Required:

What amount of interest expense should be reported in the $20$X$4$ consolidated income statement?

Prepare the journal entries Purse recorded during $20$X$4$ with regard to its investment in Scarf bonds.

Prepare all worksheet consolidation entries needed to remove the effects of the intercorporate bond ownership in preparing consolidated financial statements for $20$X$4.$Required $A$

What amount of interest expense should be reported in the $20$X$4$ consolidated income statement?

Note: Do not round your intermediate calculations. Round your final answer to nearest whole dollar.Prepare all worksheet consolidation entries needed to remove the effects of the intercorporate bond ownership in prepa

consolidated financial statements for $20$X$4.$

Note: If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field. Do not

your intermediate calculations. Round your final answers to nearest whole dollar.