Use the Following Information for Questions

Use the following information for questions.
On January 1, 2011, in an effort to lure Tar-Mart, a major discount retail chain to the area, the city of Bordeaux agreed to provide the company with a €6,000,000 three-year, Zero-interest bearing note.The prevailing rate of interest for a loan of this type is 10% and the present value of €6,000,000 at 10% for three years is €4,507,800.
-At the end of 2011, Tar-Mart will recognize

A) interest expense of €450,780.
B) grant revenue of €450,780.
C) interest revenue of €149,220.
D) none of these.