Greeson Corp. signed a three-month, zero-interest-bearing note on November 1, 2014 for the purchase of $250,000 of inventory. The face value of the note was $253,900. Assuming Greeson used a "Discount on Note Payable" account to initially record the note and that the discount will be amortized equally over the 3-month period, the adjusting entry made at December 31, 2014 will include a
A) debit to Discount on Note Payable for $1,300.
B) debit to Interest Expense for $2,600.
C) credit to Discount on Note Payable for $1,300.
D) credit to Interest Expense for $2,600.

Question

Quizplus · Accepted Answer

The Answer of Greeson Corp. signed a three-month, zero-interest-bearing note on November 1, 2014 for the purchase of $250,000 of inventory. The face value of the note was $253,900. Assuming Greeson used a "Discount on Note Payable" account to initially record the note and that the discount will be amortized equally over the 3-month period, the adjusting entry made at December 31, 2014 will include a
A) debit to Discount on Note Payable for $1,300.
B) debit to Interest Expense for $2,600.
C) credit to Discount on Note Payable for $1,300.
D) credit to Interest Expense for $2,600.