Zebra Inc. produced net income of $100,000 in 2019. They paid out half their net income in dividends and the other half was reinvested back into the company. During the year, they incurred $10,000 in interest expense. How did these transactions impact Zebra’s income for 2019?

• Income is reduced $10,000 for interest.
• Income is reduced $50,000 for dividends
• Income is reduced $60,000 for interest and dividends
• Income is not impacted.