Answer:
Option (c) is correct.
Explanation:
The journal entry is as follows:
On March 1, 2013
Interest expense A/c Dr. $2,667
To interest payable $2,667
(To record the payment of the note plus accrued interest at maturity on March 1, 2013)
Working notes:
Interest expense:
= $200,000 × 8% × (2/12)
= $200,000 × 0.08 × 0.167
= $2,667