Sunny issued a convertible bond on January 1, 20X8, for $1,000,000, which is the face value of the bonds. The bonds are convertible into 20,000 common shares and pay interest annually on December 31 at a rate of 29%. Similar bonds without a conversion feature are priced to yield 6%. The bonds mature in seven years

What is the interest expense recognized for 20X9 related to this bond?

a $48,198

b. $40,000

c. $46,098

d $60,000