On August 1 of the Current Year,Kyle Company Borrowed $278,000

Multiple Choice

On August 1 of the current year,Kyle Company borrowed $278,000 from the local bank.The loan was for 12 months at 9 percent interest payable at the maturity date.The adjusting entry at the end of the fiscal year relating to this obligation would include a

A) debit to interest expense of $25,020.
B) debit to interest expense of $10,425.
C) credit to note payable of $10,425.
D) debit to interest receivable of $10,425.