On January 1, 2014, JG Purchased a Machine and Gave

On January 1, 2014, JG purchased a machine and gave a $30,000 three-year, 8% note.The market or "going" interest rate was 12%.The annual interest payments are to be paid on each December 31.On January 1, 2014, JG should record the net liability amount determined as follows:

A) Use its face amount, $30,000 minus $7,200 interest.
B) Compute the present value of its face amount and the three $2,400 interest amounts by using a discount rate of 8%.
C) Use its face amount, $30,000 plus the $7,200 interest.
D) Compute the present value of its face amount and the three $2,400 interest amounts by using a discount rate of 12%.