On January 2, 2015, Seacoast Company, an 80%-owned subsidiary of Plantation Corp., had $1 million face value of bonds outstanding, owned by a bank. The bonds pay interest at the rate of 4% annually. Which of the following items should be included in Plantation’s consolidated financial statements?

a. Interest income, $40,000
b. Loss on investment, $40,000
c. Interest expense, $40,000
d. Interest expense, $32,000