On January 2,2016,L Co

Multiple Choice

On January 2,2016,L Co.issued at face value $20,000 of 4% bonds convertible in total into 1,000 shares of L's common stock.No bonds were converted during 2016.
Throughout 2016,L had 1,000 shares of common stock outstanding.L's 2016 net income was $2,000.L's income tax rate is 50%.
No potential common shares other than the convertible bonds were outstanding during 2016.
L's diluted earnings per share for 2016 would be:

A) $1.00.
B) $1.20.
C) $1.40.
D) $2.00.