In computing diluted earnings per share, what should be done with the interest expense associated with convertible debt?

If the convertible debt is antidilutive, subtract interest expense, net of income taxes, from net income.

If the convertible debt is dilutive, subtract interest expense, net of income taxes, from net income.

If the convertible debt is dilutive, add interest expense, net of income taxes, to net income.

If the convertible debt is antidilutive, add interest expense, net of income taxes, to net income.