A Parent Company owns 100% of its Subsidiary. During 2013, the Parent company reports net income of $1,000,000 and the subsidiary reports net income of $400,000. The Parent had a bond payable outstanding on July 1, 2012, with a carry value equal to $840,000. The Subsidiary acquired the bond on July 1, 2012 for $790,000. During 2013, the Parent reported interest expense (related to the bond) of $70,000 while the Subsidiary reported interest income (related to the bond) of $64,000. What is consolidated net income for the year ended December 31, 2013?

a. $1,400,000

b. $1,406,000

c. $1,450,000

d. $1,456,000

Please provide step by step explanation for the answer.