Potter Corporation owns 60 percent of Snape Company's voting shares. On January 1, 20X4, Snape sold bonds with a par value of $400,000 when the market rate was 6 percent. Potter 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. Based on the information given above, what amount of interest income will Potter Corporation recognize on December 31, 20X5 relative to the interest received on that day, in its separate financial statements?

		$3,633
		$7,258
		$7,224
		$3,625

Pluto Corporation owns 70 percent of Saturn Company's stock. On July 1, 20X4, Pluto sold a piece of equipment to Saturn for $56,350. Pluto had purchased this equipment on January 1, 20X1, for $63,000. The equipment's original 15-year estimated total economic life remains unchanged. Both companies use straight-line depreciation. The equipment's residual value is considered negligible. Based on the information provided, while preparing the 20X4 consolidated income statement, depreciation expense will be

		credited for $350 in the consolidation entries.
		debited for $700 in the consolidation entries.
		credited for $700 in the consolidation entries.
		debited for $350 in the consolidation entries.

Pat Corporation acquired 80 percent of Smack Corporation's voting common stock on January 1, 20X7. On December 31, 20X8, Pat received $390,000 from Smack for equipment Pat had purchased on January 1, 20X5, for $400,000. The equipment is expected to have a 10-year useful life and no salvage value. Both companies depreciate equipment on a straight-line basis. Based on the preceding information, in the preparation of the 20X9 consolidated income statement, depreciation expense will be:

credited for $25,000 in the consolidating entries.

credited for $15,000 in the consolidating entries.

debited for $25,000 in the consolidating entries.

debited for $15,000 in the consolidating entries.

Aaron, a holder of a $200,000 Post Inc. bond, collected the interest due on June 30, 20X2, and then sold the bond to Stick Inc. for $185,000. On that date the bond issuer, Post, an 80 percent owner of Stick, had a $220,000 carrying amount for this bond. Based on the information given above, what was the effect of Stick's purchase of Post's bonds on the noncontrolling interest amount reported in Post's June 30, 20X2 consolidated balance sheet?

		$7,000 increase
		No effect
		$3,000 increase
		$7,000 decrease