Business & farm

"Additions to Gross Profit
If your business has income from a source other than its regular business operations, enter the income on line 6 of Schedule C and add it to gross profit. The result is gross business income. Some examples include income from an interest-bearing checking account, income from scrap sales, income from certain fuel tax credits and refunds, and amounts recovered from bad debts."

So it would get reported as "Other Income" on Schedule C

Reading the IRS document on Disregarded Entity, it does say "Owner of Single-Member LLC

If a single-member LLC does not elect to be treated as a corporation, the LLC is a "disregarded entity," and the LLC's activities should be reflected on its owner's federal tax return. If the owner is an individual, the activities of the LLC will generally be reflected on:

• Form 1040 or 1040-SR Schedule C, Profit or Loss from Business (Sole Proprietorship)  
• Form 1040 or 1040-SR Schedule E, Supplemental Income or Loss 
• Form 1040 or 1040-SR Schedule F, Profit or Loss from Farming "

Reading this says that yes it does get reported on the Owner's Federal Tax Return as opposed to a separate tax return for the corporation, but if the Interest is earned by the "Disregarded Entity", it should be reported on Schedule C of the Owner's Tax Return.

???