Wood Corporation owns 1 percent of Carter Companys voting shares. On January 1, 20X3, Carter sold bonds with a par value of $682,500 at 98. Wood purchased $455,000 par value of the bonds; the remainder was sold to nonaffiliates. The bonds mature in five years and pay an annual interest rate of 8 percent. Interest is paid semiannually on January 1 and July 1.

A. What amount of interest expense should be reported in in the 2014 consolidated income statement?