Indirect Personnel,Inc

Multiple Choice

Indirect Personnel,Inc.obtained a $20,000 note payable on August 1,2012,that is due in 5 years.Interest,at an annual rate of 12%,will be paid once a year on July 31.The accountant made the appropriate journal entry on August 1,2012.No other journal entry has been made.What journal entry is necessary as of December 31,2012?

A) Debit Interest Expense and credit Notes Payable for $1,000
B) Debit Interest Expense and credit Notes Payable for $2,400
C) Debit Interest Expense and credit Interest Payable for $1,000
D) Debit Interest Expense and credit Interest Payable for $2,400
E) Debit Interest Expense and credit Interest Receivable for $2,400