On September 30, 20X3, Fayettechill Corp borrowed cash in exchange for a $60,000 nine-month noninterest-bearing promissory note. Interest was discounted at issuance at a 12% discount rate. The journal entry Fayettechill would record on the note issuance date would include a (hintthis is similar to the noninterest-bearing note example regarding Affiliated Technologies in the textbook):

a) DR to Cash for $54,600.

b) CR to Discount on Notes Payable for $5,400.

c) CR to Notes Payable for $54,600.

d) DR to Notes Payable for $60,000.

20) Refer to the facts in question 19. On December 31 of 20X3, Fayettechill would recognize interest expense of what amount?

a) $1,800.

b) $7,200.

c) $7,912.

d) $0.