[The Following Information Applies to the Questions Displayed Below

Multiple Choice

[The following information applies to the questions displayed below.]

Seattle Company issued a $90,000 face value discount note payable to First Federal Bank on September 1, Year 1. The note had a 4% discount rate and a one-year term.

-What is the amount of interest expense appearing on the Year 1 income statement?

A) $1,200
B) $3,600
C) $2,400
D) $7,200