P Company owns 90% of Somerville Company and both companies have several outstanding loans.On 1/1/X1, Somerville loaned P $200,000. The loan carries an interest rate of 6% and a term of two years. On 12/31/X1, P madea $32,000 loan payment to Somerville.On their respective 12/31/X1 Trial Balances, P and Somerville reported the following information:

P Somerville

Loans Payable$300,000$300,000

Interest Expense $30,000 $27,000

On 12/31/X1,P and Somerville should report a consolidated loan payable balance for which of the following amounts?

a.$400,000

b.$420,000

c.$432,000

d.$600,000

e.None of the Above