What adjusting journal entry made by litton at december

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Problem 1: On January 1, 2014, Trinity Company loaned $901,560 to Litton Industries in exchange for a 3 year, zero- interest-bearing note with a face amount, $1,200,000. The prevailing rate of interest for a loan of this type is 10%. The adjusting journal entry made by Litton at December 31, 2014 with regard to the note will include

a. A credit to Discount on Notes payable for $90,160

b. A debit to Interest Expense for $120,000

c. A credit to Interest Payable for $60,000

d. A debit to Interest Expense for $29,850

Reference no: EM132776718

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