On November 1, 2014, Best Corp.signed a three-month, zero-interest-bearing note for the purchase of $80,000 of inventory.The maturity value of the note was $81,200, based on the bank's discount rate of 6%.The adjusting entry prepared on December 31, 2014 in connection with this note will include a
A)debit to Note Payable for $800.
B)credit to Note Payable for $800.
C)debit to Interest Expense for $1,200.
D)credit to Interest Expense for $800.

Question

Quizplus · Accepted Answer

The Answer of On November 1, 2014, Best Corp.signed a three-month, zero-interest-bearing note for the purchase of $80,000 of inventory.The maturity value of the note was $81,200, based on the bank's discount rate of 6%.The adjusting entry prepared on December 31, 2014 in connection with this note will include a
A)debit to Note Payable for $800.
B)credit to Note Payable for $800.
C)debit to Interest Expense for $1,200.
D)credit to Interest Expense for $800.