Frasquita Acquired Equipment from the Manufacturer on 6/30/09 and Gave

Frasquita acquired equipment from the manufacturer on 6/30/09 and gave a noninterest-bearing note in exchange. Frasquita is obligated to pay $550,000 on 4/30/10 to satisfy the obligation in full. If Frasquita accrued interest of $15,000 on the note in its 2009 year-end financial statements, at what amount would it record the equipment on its 6/30/09 balance sheet?

A) $500,000
B) $515,000
C) $550,000
D) $525,000.$15,000 was interest for 6 months in 2009.The note lasts 10 months, so 10/6 $15,000 = $25,000 is the total interest for 10 months; the rest ($525,000) is principal, which is the cost of the equipment purchased.