On January 1, 2016, the Pruett Company Signed a Six-Month

Multiple Choice

On January 1, 2016, the Pruett Company signed a six-month, non-interest-bearing note payable for $170,000 and received $162,800 from Your Neighborhood Bank. On January 31, 2016, what amount should Pruett record for interest expense, and what is the net carrying value of the note?

A) $1,200; $161,600
B) $0; $170,000
C) $7,200; $170,000
D) $1,200; $164,000