Johnson Accepts a $5,000,7%,100-Day Promissory Note from Adam on November

Multiple Choice

Johnson accepts a $5,000,7%,100-day promissory note from Adam on November 1.What is the adjusting entry made by Johnson on December 31 to recognize the interest (using a 360-day year) ?

A) Debit Interest Expense; credit Interest Payable for $58.33
B) Debit Interest Expense; credit Interest Payable for $97.22
C) Debit Interest Receivable; credit Interest Income for $58.33
D) Debit Interest Receivable; credit Interest Income for $97.22