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Gaston Corp. signed a three-month, zero-interest-bearing note on November 1, 2017 for the purchase of $600,000 of inventory. The face value of the note was $609, 900. Gaston used a "Discount of Note Payable" account to initially record the note. Assuming that the discount will be amortized equally over the 3-month period and that there was no adjusting entry made for November, the adjusting entry made at December 31, 2017 will include a a. debit to Discount on Note Payable for $3, 300. b. credit to Discount on Note Payable for $3, 300. c. debit to Interest Expense for $6, 600. d. credit to Interest Expense for $6, 600. On September 1, Sacha purchased $59, 600 of inventory items on credit with the terms 1/15, net 30, FOB destination. Freight charges were $500. Payment for the purchase was made on September 18. Assuming Sacha uses the perpetual inventory system and the net method of accounting for purchase discounts, what amount is recorded as inventory from this purchase? a. $59,004. b. $59, 499. c. $58, 999. d. $59, 600. Patson Inc. borrowed $400,000 on April 1. The note requires interest at 12% and principal to be paid in one year. How much interest recognized for the period from April 1 to December 31? a. $0. b. $54,000. c. $36,000. d. $40, 500. Ra'ef borrowed $800,000 on October 1, 2017 and is required to pay $820,000 on March 1, 2018. What amount is the note payable recorded October 1, 2017 and how much interest is recognized from October 1 to December 31, 2017? a. $800,000 and $0. b. $800,000 and $12,000. c. $820,000 and $0. d. $800,000 and $20,000. Payless owes $4 million that is due on February 28. The company borrows $2, 500,000 on February 25 (5-year note), uses the proceeds to pay down the $3 million note, and uses other cash to pay the balance. How much of the $4 million note is classified as long-term in the December 31 financial statements? a. $4,000,000. b. $0. c. $2, 500,000. d. $1, 500,000

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