The correct response is: Kinetic energy is transferred to sound and heat energy and energy to possibly deform the garbage can.
In an inelastic collision, the total kinetic energy before and after the collision is not conserved. Instead, some of the kinetic energy is transformed into other forms of energy, such as sound (from the collision), heat (due to friction), and energy used to deform the objects involved (like the garbage can). Although momentum is conserved overall, kinetic energy is not, which is why this scenario is classified as inelastic.