If the Note Were Discounted on August 1 Under the Terms

If the note were discounted on August 1 under the terms of agreement with National Bank,which one of the following journal entries would Jones record?

A) $\begin{array}{lll}\text { DR Cash } & 39,867 \\\text { CR Note payable-National Bank } & & 39,867\end{array}$
B) $\begin{array}{lll}\text { DR Cash } & 40,000 \\\text { CR Note receivable } & & 40,000\end{array}$
C) $\begin{array}{lr}\text { DR Cash } & 39,867 \\\text { DR Interest expense } & 123\\\text { CR Note receivable }&&40,000\end{array}$
D) $\begin{array}{lrr}\text { DR Cash } & 39,867 & \\\text { DR Interest expense } & 123 & \\\quad \text { CR Note payable-National Bank } & & 40,000\end{array}$