In 20X8, Commander Cars Entity (CCE) Was Provided with a $670,000

In 20X8, Commander Cars Entity (CCE) was provided with a $670,000 interest-free loan from a national government for a period of ten years to expand operations of a new manufacturing subsidiary. The entity is located in an area of the country that has seen an exodus of production capital; therefore financing for this type of project is difficult. The market interest rate for a similar 10-year loan is 4%. No future performance conditions are attached to this loan. Which of the following entries would be included in the accounting for this loan?

A) Credit to Liability-Loan 670,000
B) Debit to Financial Asset-Cash $503,000
C) Credit to Income-Profit or Loss $167,000
D) Credit to Liability-Loan 217,000