diff --git a/CHANGES.txt b/CHANGES.txt
index a8a5f03..680076c 100644
--- a/CHANGES.txt
+++ b/CHANGES.txt
@@ -29,6 +29,11 @@ Next Release
     Overflow (V) flag.  This fixes a failure in Rob Finch's test suite.
     Closes #6.
 
+  - Applied patch from Ed Spittles so that SBC now properly sets the
+    Carry (C) and Zero (Z) flags.  This fixes failures caught by Ed's
+    own tests (see http://forum.6502.org/viewtopic.php?p=8854#8854).
+    Closes #15.
+
   - A new "save" command has been added to the monitor that will save
     a range of memory to a binary file.
 
diff --git a/src/py65/devices/mpu6502.py b/src/py65/devices/mpu6502.py
index 9df3bda..566e8a8 100644
--- a/src/py65/devices/mpu6502.py
+++ b/src/py65/devices/mpu6502.py
@@ -382,17 +382,17 @@ class MPU:
       else:
         borrow = 1
 
-      result = self.a - data - borrow
+      result = self.a + (~data & 0xFF) + (self.p & self.CARRY)
       self.p &= ~(self.CARRY + self.ZERO + self.OVERFLOW + self.NEGATIVE)
       if ( (self.a ^ data) & (self.a ^ result) ) & 0x80:
         self.p |= self.OVERFLOW
-      data = result
+      data = result & 0xFF
       if data == 0:
-        self.p |= self.ZERO + self.CARRY
-      elif data > 0:
+        self.p |= self.ZERO
+      if result & 0x100:
         self.p |= self.CARRY
       self.p |= data & self.NEGATIVE
-      self.a = data & 0xFF
+      self.a = data
 
   def opDECR(self, x):
     if x is None: