Question & Answer: Greeson Corp. signed a three-month, zero-interest-bearing note on November 1, 2014 for the purchase of $250,000 of inventory. The…..

17.       Greeson Corp. signed a three-month, zero-interest-bearing note on November 1, 2014 for the purchase of $250,000 of inventory. The face value of the note was $253,900. Assuming Greeson used a “Discount on Note Payable” account to initially record the note and that the discount will be amortized equally over the 3-month period, the adjusting entry made at December 31, 2014 will include a

a.   debit to Discount on Note Payable for $1,300.

b.   debit to Interest Expense for $2,600.

c.   credit to Discount on Note Payable for $1,300.

d.   credit to Interest Expense for $2,600.