Wood Corporation owns 70 percent of the voting shares of Carter Company. On January 1, 20X3, Carter Company sold bonds with a par value of \(\$ 600,000\) at 98 . Wood Corporation purchased \(\$ 400,000\) par value of the bonds and 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 .

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a. What amount of interest expense should be reported in the 20X4 consolidated income statement?

b. Give the journal entries recorded by Wood Corporation during 20X4 with regard to its investment in Carter Company bonds.

c. Give all workpaper eliminating entries needed to remove the effects of the intercorporate bond ownership in preparing consolidated financial statements for \(20 \mathrm{X} 4\).