Dobson LLC reports ordinary income (before guaranteed payments and rent) of $120,000, rent expense of $40,000, and interest income of $4,000 for the year. In addition, Dobson paid guaranteed payments to partner Pearl of $20,000. If Pearl owns a 40% capital and profits interest, how much income will she report for the year and what is its character?

$32,000 ordinary income, 1,600 interest income.

$24,000 ordinary income, $1,600 interest income, $20,000 guaranteed payment.

$25,600 ordinary income.

$32,000 ordinary income, $1,600 interest income, $20,000 guaranteed payment.

$24,000 ordinary income.