Use the Following to Answer Questions

Multiple Choice

Use the following to answer questions
Seattle Company issued a $90,000 face value discount note payable to the First Federal Bank on September 1,2016.The note carried a one-year term and a 4% discount rate.
-As a result of the recognition of interest expense on December 31,2016,

A) liabilities will increase and retained earnings will decrease.
B) assets and liabilities will decrease.
C) assets will increase and retained earnings will increase.
D) liabilities will increase and assets will decrease.