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 $1,600,000 and the subsidiary reports net income of $1,000,000. The Parent had a bond payable outstanding on July 1, 2019, with a carry value equal to $800,000. The Subsidiary acquired the bond on July 1, 2019 for $840,000. During 2020, the Parent reported interest expense (related to the bond) of $80,000 while the Subsidiary reported interest income (related to the bond) of $75,000. What is consolidated net income for the year ended December 31, 2020?

Select one:

a. $2,600,000

b. $2,685,000

c. $2,595,000

d. $2,605,000