1. Culver Corporation owns 60 percent of Fowler Company's voting shares.On January 1, 20X4, Fowler sold bonds with a par value of $800,000 when the market rate was 6 percent.Culver purchased one-third of the bonds; the remainder was sold to nonaffiliates.The bonds mature in 15 years and pay an annual interest rate of 5 percent.Interest is paid semiannually on June 30 and December 31.

A.Based on the information given above, what amount of interest expense should be reported in the 20X5 consolidated income statement?

1. $0
2. $28,896
3. $29,032
4. $43,550

B. Based on the information given above, what amount of interest income will Culver Corporation recognize on December 31, 20X5 relative to the interest received on that day, in its separate financial statements?

$7,250

$7,266

$14,448

$14,516

C. Based on the information given above, what amount of interest expense will be eliminated in the preparation of the 20X5 consolidated financial statements?

$14,448

$14,518

$29,032

$43,550