On January 1, Jewel Company buys $204,000 of Marcelo Corp. 10%, 36-month notes. Interest is paid on the last day of each month. The notes are classified as available-for-sale securities. This is the company's first and only investment in available-for-sale securities. On December 31, the notes have a fair value of $207,700. The impact on Jewel's net income as a result of its investment in Marcelo Corp. was a(n) (Round your intermediate dollar values to the nearest dollar amount):
A. Decrease to income of $20,400.
B. Increase to income of $1700.
C. Increase to income of $24,100.
D. Decrease to income of $24,100.
E. Increase to income of $20,400.
Answer: E
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