Diana Co. issues a $208,000 6-month, zero-interest-bearing note to Tang National Bank. The present value of the note is $200,000. The entry to record this transaction by Diana Co. would include a

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The discount on notes payable represents the difference between the face value of the note and its present value, which is $8,000 ($208,000 - $200,000). This amount is debited to the Discount on Notes Payable account.

Diana Co Issues a $208,000 6-Month, Zero-Interest-Bearing Note to Tang National