Purse Corporation owns 70 percent of Scarf Company's voting shares. On January 1, 20x3, Scarf sold bonds with a par value of $697,500 at 98. Purse purchased $465,000 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. Required: a. What amount of interest expense should be reported in the 20X4 consolidated Income statement? (Do not round your intermediate calculations. Round your final answer to nearest whole dollar.) Answer is complete and correct. Interest expense S 19,488 b. Prepare the journal entries Purse recorded during 20X4 with regard to Its Investment in Scarf bonds. (If no entry is required for a transaction/event, select "No journal entry required" In the first account field. Do not round your Intermediate calculations. Round your final answers to nearest whole dollar.) Answer is complete but not entirely correct. No Date General Journal Debit Credit 1 January 1, 20X4 Cash 18,600 Interest receivable 18,600 2 July 1, 20X4 Cash Investment in Scarf Company bonds Interest income 3 December 31, 20X Interest receivable Investment in Scarf Company bonds Interest income 300 18,600 975 X 19.511 18,000 911 19,511 c. Prepare all worksheet consolidation entries needed to remove the effects of the Intercorporate bond ownership in preparing consolidated financial statements for 20X4. (If no entry is required for a transaction/event, select "No journal entry required" In the first account field. Do not round your Intermediate calculations. Round your final answers to nearest whole dollar.) Answer is complete but not entirely correct. No Event A 1 Bonds payable Interest income B 2 Accounts Investment in Scarf Company bonds Bond discount Interest expense Interest payable Interest receivable Debit Credit 465,000 18,600 459,420 13,950 x 39,060 18,600 18,600