What Is the Holder of the Note's Entry to Record

Multiple Choice

What is the holder of the note's entry to record the proceeds of a note received, with interest accrued in the previous year (assume there is no reversing entry) ?

A) Debit Cash; credit Interest Receivable; credit Notes Receivable; credit Interest Income
B) Debit Notes Payable; debit Interest Expense; debit Interest Payable; credit Cash
C) Debit Cash; debit Interest Expense; credit Notes Payable
D) Debit Notes Receivable; debit Interest Income; credit Cash