Martin Corp, signed a $253,900, three-month, zero interest-bearing note on November 1, Year 4 for the purchase of inventory. The present value of the note was $250,000. Assuming Martin used a "Discount on Note Payable" account to initially record the note and that i the discount will be amortized equally (straight line) over the 3-month period, the adjusting entry made at December 31, Year 4 should be: Select one: Oa. Interest Expense O b. Interest Expense Oc Note Payable Discount on Notes Payable Discount on Notes Payable Discount on Notes Payable Od. Discount on Notes Payable Interest Expense 1,300 2,600 2,600 1,300 1,300 2,600 2,600 1,300
Martin Corp, signed a $253,900, three-month, zero interest-bearing note on November 1, Year 4 for the purchase of inventory. The present value of the note was $250,000. Assuming Martin used a "Discount on Note Payable" account to initially record the note and that i the discount will be amortized equally (straight line) over the 3-month period, the adjusting entry made at December 31, Year 4 should be: Select one: Oa. Interest Expense O b. Interest Expense Oc Note Payable Discount on Notes Payable Discount on Notes Payable Discount on Notes Payable Od. Discount on Notes Payable Interest Expense 1,300 2,600 2,600 1,300 1,300 2,600 2,600 1,300
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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