On December 31, 2019, Parent Co. has a bond issue outstanding that has a face value of $1,000,000, an unamortized premium of $50,000, a coupon rate of 8%, and five years remaining to maturity. Non-affiliated investors hold all of the bonds. Market rates of interest have risen above the coupon rate on the bonds, and have caused the market price of Parent Co.'s bonds to fall.

On December 31, 2019, Sub Co. purchases all of the outstanding bonds of Parent Co. for $900,000.

If during 2019 Parent recorded bond premium amortization of $10,000, what would be the reported amount of interest expense related to the bonds on the consolidated income statement for 2019?

Multiple Choice

• a). $0

• b). $70,000

• c). $80,000

• d). $90,000