Purse Corporation owns $70$ percent of Scarf Company$$s voting shares. On January $1,20$X$3,$ Scarf sold bonds with a par value of $$600,000$ at $98.$ Purse purchased $$400,000$ par value of the bonds; 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 $1.$

Note: Assume using straight$-$line amortization of bond discount or premium.

Required:

What amount of interest expense should be reported in the $20$X$4$ consolidated income statement?

Prepare the journal entries Purse recorded during $20$X$4$ with regard to its investment in Scarf bonds.

Prepare all worksheet consolidation entries needed to remove the effects of the intercorporate bond ownership in preparing consolidated financial statements for $20$X$4.$