On january 1, 2020, reagan enterprises sold property to dupree company in exchange for a $4,000,000 zero-interest-bearing note. the note is payable in 5 equal annual installments with the first payment due on december 31, 2020. the prevailing rate of interest for a note of this type is 9%. the present value of the note at 9% was $2,884,000 on the date of issuance. assuming dupree uses the effective-interest method, the balance of the discount on notes payable account on december 31, 2020, after adjusting entries are made should be:_____.
a. $1,116,000.
b. $0.
c. $856,440.
d. $892,800.