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On 1 January 2020, X company borrowed 4-year $10000 zero-interest bearing notes from Arab bank. The interest is payable on December 31. The implicit interest

On 1 January 2020, X company borrowed 4-year $10000 zero-interest bearing notes from Arab bank. The interest is payable on December 31. The implicit interest rate is 0.08. X uses the straight-line method. The adjusting entry on 31 December 2020 includes

a.

Debit discount on notes payable 2650

b.

Credit discount on notes payable 2650

c.

Debit discount on notes payable 662

d.

Credit discount on notes payable 662

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