(TCO 3) Pet. Co owns 75% of Saber Co. Wool Co. (an unrelated company), a holder of a $1,000,000 Pet Co. bond, collected the interest due on March 31, 20x1, and then sold the bond to Saber Co. for $975,000. On that date, Pet (75% owner of Saber) had a $1,075,000 carrying amount for this bond. Which was the effect of Saber's purchase of Pet's bond on the retained earnings and noncontrolling interest amounts reported in Pet's March 31, 20x1, consolidated balance sheet?

A.

Retained earningsNoncontrolling interest

$100,000 increase$0

B.

Retained earningsNoncontrolling interest

$75,000 increase$25,000 increase

C.

Retained earningsNoncontrolling interest

$0$25,000 increase

D.

Retained earningsNoncontrolling interest

$0$100,000 increase