Panda Company acquired a $20,000 bond originally issued by its 75%-owned subsidiary on January 2, 2015. The bond was issued in a prior year for $21,250, matures January 1, 2020, and pays 8% interest at December 31. The bond's book value at January 2, 2015 is $20,625, and Panda paid $18,500 to purchase it. Straight-line amortization is used by both companies. How much interest income should be eliminated in 2015?

a.

$1720

b.

$1800

c.

$1700

d.

$1,900