Soap Company issued $200,000 of 8%, 5-year bonds on January 1, 20X6. The discount on issuance was $12,000. Bond interest is paid annually on December 31. On December 31, 20X8, Pumice Company purchased one-half of the outstanding bonds for $96,000. Both companies use the straight-line method of amortization.

How much interest expense will appear on the December 31, 20X9, consolidated income statement?

a. $18,400

b. $16,000

c. $9,200

d. $8,000

PLEASE PROVIDE THE CALCULATION FOR YOUR ANSWER.