Exhibit 14-16 Harry's Inc. Issued a Four-Year, $75,000, Non-Interest-Bearing Note to a to a Customer

Exhibit 14-16
Harry's Inc. issued a four-year, $75,000, non-interest-bearing note to a customer on January 1, 2016. Harry also agrees to sell inventory to the customer at reduced rates over a five-year period. Sales are to be evenly spread over the five-year period. Harry's incremental interest rate is 8%, and the present value of the note is $55,125.
-Refer to Exhibit 14-16. Harry's total liabilities after recording the note have increased by

A) $19,875.
B) $75,000.
C) $55,125.
D) $81,000.