3. Royce Company purchased 25% interest in Bell Corporation's common stock on January 10. At year-end, Bell Corporation reported net income of $250,000. Under the equity method, Royce Company's journal entry to record its share of Bell Corporation's net income would include a a. debit; Investment in Bell Corporation Stock for $62,500 b. credit; Investment in Bell Corporation Stock for $62,500 c. debit; Income of Bell Corporation for $250,000 d. credit; Income of Bell Corporation for $250,000 to 4. If the investor purchases more than 50% of the outstanding stock of the investee, the investor is considered to have over the investee. a. influence b. significant influence c. control d. power 5. Heller Company purchased 1,000 shares of Carpenter Corporation's common stock with a cost of $10,000 on January 1. On May 15, Heller sold 500 shares of Carpenter Corporation's common stock. The fair market value of the investment on December 31 is $7,000. Calculate the unrecognized gain or loss for the period. a. $500 gain b. $3,000 loss c. $2,500 loss d. $2,000 gain