A Parent Company owns 100% of its Subsidiary. During 2020, the Parent reports a net income (by itself, without any investment income from its Subsidiary) of $800,000 and the subsidiary reports a net income of $500,000. The Parent had a bond payable outstanding as of July 1, 2019, with a book value equal to $440,000. The Subsidiary acquired the bond on July 1, 2019 for $400,000. During 2020, the Parent reported interest expense (related to the bond) of $40,000 while the Subsidiary reported interest income (related to the bond) of $37,500.

What is the consolidated net income for the year ended December 31, 2020?

Answer rating: 100% (QA)

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