25. A Parent Company owns 100% of its Subsidiary. During 2020, the Parent company reports net income (by itself, without any investment income from its Subsidiary) of $800,000 and the subsidiary reports net income of $500,000. The Parent had a bond payable outstanding on July 1, 2019, with a carry value equal to $440,000. The Subsidiary acquired the bond on July 1, 2019 for $400,000. During 2020, the Parent reported interest expense (related to the bond) of $40,000 while the Subsidiary reported interest income (related to the bond) of $37,500.

What is consolidated net income for the year ended December 31, 2020?

a. $1,297,500

b. $1,300,000

c. $1,302,500

d. $1,342,500