Dodge, Incorporated acquires 15% of Gates Corporation on January 1, 20x1, for $100,000 when the book value of Gates was $600,000. On 12/31/20x1, Gates was appraised to be $680,000 fair market value. On January 1, 20x2, Dodge purchased an additional 25% of Gates for $200,000 to achieve significant influence over Gates. At the time of Dodge's purchase of additional 25%, there were one identifiable equipment and one bonds payable (i.e., liability) reported to have different book values from their fair market values. Amount Equipment (useful life = 5 years) Bonds Payable (useful life = 3 years) Under-valued Over-valued $10,000 $3,000 Gate also reported the following information and Gate did not issue any new shares or buy back any shares of stocks over the three years. Year Net Income Dividends $20,000 20x1 20x2 20x3 $100,000 $80,000 $120,000 $20,000 $20,000 For 20x1, what is total effect on income statement for Dodge's purchase of 15% of Gates? Select one: o a. $2,000. O b. $15,000. O C. $3,000. O d. $5,000